The Effect of Financial Development on Economic Growth in BRIC-T Countries: Panel Data Analysis

Abstract

In this study, the effect of financial development on economic growth was researched for the most rapidly developing countries (emerging markets) (Brazil, Russia, India, China and Turkey, BRIC-T) via panel data analysis using the annual data for the period from 1989 to 2010. Foreign direct investments and trade openness, which was thought to have effects on the growth, were included in the analysis. According to empirical evidence derived from the study made with panel data analysis it was found that the effect of financial development on economic growth was positive and statistically significant in line with theoretical expectations. Evidence that even foreign direct investments and openness contributed to the growth positively was also found.