ISSN 2756-3677
International Journal of Banking, Economics and Finance ISSN: 8201-4728 Vol. 4 (1), pp. 001-010, January, 2020. © International Scholars Journals
Full Length Research Paper
The direction of the financial sector’s involvement in overcoming crisis: A case study of Romania
Mirela Cristea*, Raluca Dracea and Nicu Marcu
University of Craiova, Faculty of Economics and Business Administration, A. I. Cuza Street, No. 13, Finance Department, Craiova, Dolj, Romania.
Accepted 10 September, 2018
Abstract
In the present economic circumstances of economical-financial crisis on a world-wide level, for the Romanian economy, the financial sector, being a key factor, have a great importance for supporting economic growth. The aim of this paper is to analyse the finance-growth relation in Romania, using quarterly data and applying statistical methods for a period of nine years. As such, we measure the qualitative development in the banking sectors using the interest rate margin and the value of total credit. Due to specific characteristics of the economic situation in Romania and other previous studies related to economic growth and credit market development, our results provide the answer to the question of whether or not the economic growth rate is always sustained by the financial sector development. The major findings and conclusion are that, in Romania, a short-run increase of bank loan and interest rate margin determines a decrease of economic growth, given by the coefficients of regression equation.
Key words: Credit market, economic growth, correlations, statistical analysis.