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Title: Financial development and economic growth before and after the recent financial crisis : evidence from EU countries
Author: Spanos, Konstantinos
ISNI:       0000 0004 8507 9298
Awarding Body: Oxford Brookes University
Current Institution: Oxford Brookes University
Date of Award: 2019
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This thesis investigates the nance-growth relationship in view of the recent nancial crisis for the EU countries from 1990 to 2016. The empirical approach examines two sub-periods before and after the crisis and employs static and dynamic panel models. The results from the static panel approach suggest that nancial development promoted economic growth at regular times, with market sector prevailing in this positive eect. In contrast, at stress times, nancial development hindered economic activity, with the bank sector dominating in this adverse eect. The ndings of the dynamic models in the long-run suggest a positive and signicant eect of the market sector before the crisis, while after the crisis, there is an inverse nance-growth relationship. However, the overall results reveal that the post-crisis economic growth recovery rather weak and the nancial system has not enhanced the economic activity. With respect to the previous literature, the present research provides new evidence on the nance-growth nexus in view of the recent crisis, suggesting that the weakness of the nancial system to enhance economic growth exhibits high persistence eight years after the occurrence of nancial crisis and the banking system evolves signicantly in a worse way compared to the pre-crisis period. Moreover, when the nancial development is examined in conjunction with the role of scal policy, the ndings reveal that banks and other institutions held more government bonds to enhance the governments' credibility not to default, and the ability of intermediaries to invest on assets was limited. Furthermore, a signicant nding in this study is that of the deposit guarantee schemes, and the capital adequacy of banks during 2008-2009 protected depositors and promoted the stability of the nancial system which restrained the economy to permissible growth levels thus not leading to a collapse. A further remarkable nding is that the stock market participants during crisis periods, because of the doubt about the direction of the stock market, are reluctant to act as investors, and thus future trading on specied securities tends to increase as well as share prices fell.
Supervisor: Asteriou, Dimitrios ; Trachanas, Emmanouil Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral