Evaluating the impact of financial development on economic growth

Evaluating the impact of financial sector on economic performance of Albania is the goal of this study. It has been formulated two hypotheses: loan affects economic performance and there is a relationship between financial development and economic growth. Selecting the right variables to measure financial development concepts and economic growth, it is one of the most sensitive part in the process of evaluating this relationship. The hypotheses are controlled through panel data regression and dynamic model and for the evaluation method of these models is used the least squares method (LS) and the general method of moments (GMM). The empirical findings reinforce the importance of the lending process in the economic performance and the existence of the relationship between financial development and economic growth. The conclusions are consistent with the theory.

Autorentext

Gentjan era is a young researcher and lecturer at Economy and Agribusiness Faculty, Agricultural University of Tirana, Albania. His research fields are financial management, rural finance, bank and other financial institutions.