Leasing and Economic Growth - Evidence for Central and South Eastern Europe
33 Pages Posted: 18 Feb 2009 Last revised: 10 Feb 2011
Date Written: February 15, 2009
Abstract
Credit and its vast growth in transition economies attracted a lot of research while less attention was given to the even faster growth of leasing and the aggregate impact of financial market segments. Applying a panel data approach over 1999-2006, we investigate the finance-growth nexus (credit, stock, bond) for ten Eastern European countries with a production function and include leasing. We find that leasing and credit positively contributed to economic growth; we confirm on a broader basis that macroeconomic stability and a sound legal system are important preconditions for a positive impact of the financial sector; we find that leasing and credit are rather complements than substitutes and that taking alternative forms of finance like leasing into consideration is necessary for a full picture of the impact of finance.
Keywords: Leasing, credit, Central and South Eastern Europe, transition countries, economic growth
JEL Classification: G21, O11, O16, 052, P34
Suggested Citation: Suggested Citation
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