Relationship between economic growth and financial development: A empiric approach to transition economies

Regardless of the level of development, economic growth is the main objective for all economies. This is especially important for transition economies that adopt the market economy and do not have an advanced financial system. Therefore, the scope of this study is related to economic growth, financial development (development of banking sector and stock exchange) and macroeconomic variables in transition economies. In the first chapter, the basic concepts of economic development were addressed, followed by the historical development of the banking sector and the stock exchange and the relationship between these three variables, as well as the relationship between macroeconomic variables and economic development. In the second chapter, transition economies are explained and their macroeconomic developments are tried to be explained. In third chapter, development of banking sector and stock market in transition economies was telled. In the application part, the relationship between the 2003-2011 economic growth and financial development of 10 countries of transition economies, Bulgaria, Croatia, Hungary, Kazakhstan, Kyrgyzstan, Macedonia, Poland, Romania, Serbia and Turkey was investigated by panel data analysis.