Journal of Scientific Papers

ECONOMICS & SOCIOLOGY


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ISSN 2071-789X

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The impact of the economy financialization on the level of economic development of the associate EU member states

Vol. 12, No 4, 2019

Inna Shkolnyk,

 

Sumy State University, Ukraine

Email: inna_shkolnik@ukr.net

The impact of the economy financialization on the level of economic development of the associate EU member states

 

Serhiy Kozmenko,

 

University of Social Science, Lodz, Poland

University of Customs and Finance, Dnipro, Ukraine

E-mail: kozmenko.uabs@gmail.com


Olga Kozmenko,

 

Kharkiv National University of Economics, Ukraine

E-mail: o.v.kozmenko@gmail.com


Borys Mershchii,

 

Sumy State University, 

Ukraine


 


 

Abstract. Dynamic development of the financial system has an increasing impact on the state and development of both national economies and the world economy. This problem is especially acute in developing countries and is predetermined by their economic, social and political development. It also requires constant evaluation and control over the level of their economic development in terms of financialization. Within the framework of the European Neighborhood Policy, the EU cooperates with the countries of the region to deepen and strengthen the relations and helps to increase the stability and sustainability of its Eastern neighbors. Ukraine, Moldova, and Georgia today are currently Associated Eastern Partnership members. Using the panel data for these countries over the period of 2007–2017, the relationship between economic growth and indicators of financialization of the economies was determined. To this end, a fixed-effect regression model, the statistical adequacy of which was confirmed by many indicators (significance levels, R-squared coefficients, the Breusch-Pagan test), is also used. It was determined that employment, exports of goods and services, added value created in the industrial sector, the ratio of bank capital and reserves to total assets, the share of М1 monetary aggregate in GDP, deposit rate, and Gini index had a positive influence on economic growth of the countries in question.

 

Received: May, 2019

1st Revision: July, 2019

Accepted: November, 2019

 

DOI: 10.14254/2071-789X.2019/12-4/2

JEL ClassificationС10, G10, О16

Keywords: panel data, GLS methods, financial globalization, financial system, industry output, direct investment in the economy, Gini index