Financial Development, Economic Growth and Welfare : Evidence From Emerging Countries

Purpose- This study investigates how financial development has affected the economic growth and welfare for four emerging economies, namely Brazil, Turkey, Hungary, and, Poland over the period 2000-2013.Methodology- In this research, we employed a panel dataset for the four countries using five different indicators for financial development separately. Which are (financial development index, domestic credit to the private sector, stock exchange market capitalization, and Lerner Index).Findings- The results confirmed that financial development has a positive impact on economic growth, and there is a difference between Turkey, Brazil, Poland, and Hungary in terms of the impact size of financial development on economic growth. The highest and most energetic effect was on Turkey then on Poland, then on Hungary, and finally on BrazilConclusion- This study found that GDP growth is highly correlated with financial development. Thus, countries may undertake different steps to increase the efficiency of their financial sectors and therefore enhance their economic growth