The effect of financial development on economic growth in developing countries

It is an accepted assumption in the scientific world that financial development and the factors that are associated with financial development have an important role for economic growth. In line with the stated importance, this thesis study investigated the effect of financial development on economic growth. In the study, which takes into account the period 2010-2021, 10 developing country economies were selected as a sample. After all the tests, regression analysis was performed with the Driscoll-Kraay Estimator. According to the analysis results, where the latest global pandemic, Covid19, was added as a dummy variable, financial development positively affected economic growth within the scope of the study. 1% increase in financial development supported economic growth by 0.42%. Among the evidence, it was found that the Covid-19 pandemic did not have a statistically significant impact on economic growth in the reference period. According to the findings, it was confirmed that the financial structure had an important role in ensuring economic growth. In this context, effective use of financial instruments is recommended for the sustainable growth goal. In addition, creating of economic policies to eliminate the negative effects of crisis periods is another suggestion of the study. Key Words: Financial Development, Economic Growth, Developing Countries, Panel Data Analysis.