The Contribution of Financial Institutions to Economic Growth

Abstract

This chapter explores the influence of the banking and insurance sectors on the economic growth of Czechia, a nation with unique financial dynamics ideal for this study. Our aim is to ascertain the contribution of these financial institutions to economic growth, addressing the divergence in empirical findings that have marked this research area for decades. We scrutinise the impact of various factors, including sectoral development and the efficiency and stability of these institutions, all within the Czech context. Utilising the Granger causality test, we assess the role of several indicators related to the development of the banking and insurance sectors. Our findings reveal that in Czechia, the evolution and operational efficiency of these financial institutions significantly drive economic growth. This study provides an in-depth understanding of the role these sectors play in the Czech economic landscape, affirming their crucial contribution to the nation's economic prosperity.

Citation

Palečková, I., Přečková, L. and Hlawiczka, R. (2024), "The Contribution of Financial Institutions to Economic Growth", Stavárek, D. and Tvrdoň, M. (Ed.) Modeling Economic Growth in Contemporary Czechia (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 251-263. https://doi.org/10.1108/978-1-83753-840-920241016