engleski

Economic Growth in the Southeastern Europe: The Role of the Banking Sector

We analyse the banking sector efficiency – economic growth relationship using a panel data analysis of six Southeastern European countries during the period 1995-2005. The analysis is concentrated on the banking sector, since other segments of the financial market are underdeveloped in our sample of countries. We measure the qualitative development in the banking sectors by using the margin between lending and deposit interest rates as well as the share of the nonperforming loans. By applying the panel data method in the growth-type equation setting, we confirm that the improvements in the banking sector efficiency, through the decreasing interest rate spread, exerted positive influence on the growth rate of the countries in region.

banking sector; economic growth; SEE countries; panel data analysis

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