اثرات رشد غیرخطی توسعه ی مالی:آیا یکپارچه سازی مالی مساله است؟

Using both macro- and industry-level data this paper analyses the non-linear effects of financial development and international financial integration on economic growth in Europe. Special attention is devoted to modeling threshold effects with respect to the depth of financial markets as a measure of economies' absorption capacity. Results reveal evidence of significant non-linear effects, with less developed European countries gaining more from financial development. In contrast, benefits of international financial integration become significant at higher levels of financial development. The data show that monetary integration in Europe significantly contributed to a higher degree of financial integration. Entry of new EU members to the European Monetary Union may thus be the mechanism ensuring a virtuous development circle, as the adoption of the Euro may allow the development of domestic financial markets and financial integration to go hand-in-hand.

The aim of the paper is to analyze the likely effects of the process of euro adoption on financial development and growth in new EU member countries. About two decades ago the new EU members started the process of transition to market economies. This process led also to the creation of previously non-existent financial markets. Starting with Slovenia in 2007, it is now evident that the most advanced countries in the group will soon join the European Monetary Union. Because this process is and will be the strongest driving force of further financial integration of these countries with the rest of the EU, the likely economic consequences of this process represent a challenging subject of investigation.

This study analyses potential effects that the enlargement of the Euro area may have on growth in acceding countries through increased financial integration and development of national financial markets. We complement a standard macro-level approach of studying the growth effect of financial integration with the use of augmented empirical approach by Rajan and Zingales (1998) on industry-level data. The analysis covers both the group of developed “old” EU and several transition countries, among them all the new EU members and hence also future members of the EMU. Our results confirm a positive effect on growth both from development of national financial markets and financial integration. However, the effects are highly non-linear. First, we observe that the positive effect of the development of domestic financial markets on growth is higher in less developed countries, represented by a group of transition countries in our case. The effect may vanish as financial development approaches the levels characterizing the EU15. In addition, we find that financial integration may not have a positive effect on growth per se, as its effects depend on the development of national financial markets, macroeconomic stability and quality of institutions. Indeed, our estimates detect a significant positive effect of financial integration on growth only for countries with sufficient absorptive capacity, measured by the level of financial development. The absence of such effect for less developed economies can be attributed to lower level of financial development, institutional design and macroeconomic volatility. However, most new EU members have already achieved a level of financial development that enables them to benefit from further financial integration, both directly and indirectly through the development of national financial markets. Joining the European Monetary Union, by accelerating the process of financial integration, may thus have large positive effect on growth in the new EU member countries.