Determinants of Economic Growth in the European Union Countries

Statistika, 101(4): 357-369

This paper reassesses the long-debated relationship between the financial system development and economic growth. We use not only indicators for financial access, efficiency, stability and depth of the bank-orientedfinancial sector, but we also consider Eurozone membership, corruption perception and competitiveness of countries to examine the determinants of economic growth. We apply a panel data approach to 27 Europeancountries over the 2004–2017 period. By splitting the time span, we examine whether the effect of financialsystem development, Eurozone membership, corruption perception and competitiveness on economic growthis affected by the occurrence of financial and debt crises. Our results indicate that loans to private sector do notalways support economic growth. Our research also reveals that corruption perception has a negative impact on economic growth, and so does membership in Eurozone during a crisis.