Export file:


  • RIS(for EndNote,Reference Manager,ProCite)
  • BibTex
  • Text


  • Citation Only
  • Citation and Abstract

Financial and non-financial investments: comparative econometric analysis of the impact on economic dynamics

1 Institute of Economics, Russian Academy of Sciences, 32 Nakhimovsky prospekt, Moscow, 117218, Russia
2 Economic faculty, Perm State National Research University, 15 Bukireva street, Perm, Russia, 614068, Russia

The purpose of the study is to determine the degree of influence of investments in financial and non-financial assets on the rate of economic growth in a comparative aspect for the US, German and Russian economies. It is determined by the level of development of the financial sector, which can either support growth or slow it down. The methodology of the study is a structural analysis and an econometric approach which allows to build econometric models when the dynamics of GDP and types of investments, to the structural formula as a model to evaluate the contribution of each type of investment in economic growth. A regression analysis was used to show the relationship between financial and non—financial investments, the growth rate of the economy and the financial market bias parameter proposed in the framework of the analysis, an increase in which indicates an expansion of the financial market's influence, a decrease—a reduction in such influence. The built econometric models made it possible to give a forecast estimate of GDP dynamics in the unfolding recession of 2020–2021, when reducing financial and non-financial investments, identifying together with the application of the structural formula and the possible change in the contribution of investments to the rate of economic growth, when their own rate changes. The study also revealed a sharp increase in the financial market bias in the Russian economy compared to the United States and Germany, which significantly affects the rate of economic growth, depending on changes in financial investment. This unbalanced influence requires macroeconomic policy measures to correct the structural imbalance between financial and non-financial investments.
  Article Metrics


1. Afonso A, Aubyn M (2019) Economic growth, public, and private investment returns in 17 OECD economies. Port Econ J 18: 47-65.    

2. Afonso A, Jalles J (2015) How does fiscal policy affect investment? Evidence from a large panel. Int J Financ Econ 20: 310-327.

3. Allen F, Bartiloro L, Gu X, et al. (2018) Does economic structure determine financial structure? J Int Econ 114: 389-409.    

4. Baltagi B (2011) Econometrics, Fifth Edition, Berlin: Springer Cop., 410.

5. Bangake C, Eggoh J C (2011) Further evidence on finance-growth causality: A panel data analysis. Econ Syst 35: 176-188.    

6. Beck R, Georgiadis G, Straub R (2014) The finance and growth nexus revisited. Econ Lett 124: 382-385.    

7. Bernier M, Plouffe M (2019) Financial innovation, economic growth, and the consequences of macroprudential policies. Res Econ 73: 162-173.    

8. Botev J, Égert B, Jawadi F (2019) The nonlinear relationship between economic growth and financial development: Evidence from developing, emerging and advanced economies. Int Econ 160: 3-13.    

9. Bucci A, Russo A (2019) Finance and long-term growth: Economic modelling and evidence. J Econ Behav Organ 162: 188-192.    

10. Chu LK (2020) Financial structure and economic growth nexus revisited. Borsa Istanbul Rev 20: 24-36.    

11. Combes JL, Kinda T, Ouedraogo R, et al. (2019) Financial flows and economic growth in developing countries. Econ Model 83: 195-209.    

12. Ductor L, Grechyna D (2015) Financial development, real sector, and economic growth. Int Rev Econ Financ 37: 393-405.    

13. Fuente-Mella H, Fuentes JLR, Leiva V (2020) Econometric modeling of productivity and technical efficiency in the Chilean manufacturing industry. Comput Ind Eng 139.

14. Ghosh A (2017) How does banking sector globalization affect economic growth? Int Rev Econ Financ 48: 83-97.    

15. Hillebrand E, Pretis F, Proietti T (2020). Econometric models of climate change: Introduction by the guest editors. J Econometrics 214: 1-5.    

16. Hu M, Zhang J, Chao C (2019) Regional financial efficiency and its non-linear effects on economic growth in China. Int Rev Econ Financ 59: 193-206.    

17. Ibrahim M, Alagidede P (2018) Effect of financial development on economic growth in sub-Saharan Africa. J Policy Model 40: 1104-1125.    

18. Kavya TB, Shijin S (2020) Economic development, financial development, and income inequality nexus. Borsa Istanbul Rev 20: 80-93.    

19. Mensi W, Hammoudeh S, Tiwari AK, et al. (2020) Impact of Islamic banking development and major macroeconomic variables on economic growth for Islamic countries: Evidence from panel smooth transition models. Econ Syst 44.

20. Mollaahmetoğlu E, Akçalı B (2019) The Missing-Link between Financial Development and Economic Growth: Financial Innovation. Proc Comput Sci 158: 696-704.    

21. Nguyen YN, Brown K, Skully M (2019) Impact of finance on growth: Does it vary with development levels or cyclical conditions? J Policy Model 41: 1195-1209.    

22. Peia O, Roszbach K (2015) Finance and growth: Time series evidence on causality. J Financ Stab 19: 105-118.    

23. Pradhan RP, Arvin MB, Hall JH, et al. (2017a) ASEAN economic growth, trade openness and banking-sector depth. Nexus Economia 18: 359-379

24. Pradhan R, Arvin MB, Bahmani S, et al. (2017b) Finance and growth: Evidence from the ARF countries. Q Rev Econ Financ 66: 136-148.

25. Redmond T, AliNasir M (2020) Role of natural resource abundance, international trade and financial development in the economic development of selected countries. Resour Policy 66.

26. Swamy V, Dharani M (2019) The dynamics of finance-growth nexus in advanced economies. Int Rev Econ Financ 64: 122-146.    

27. Sukharev OS (2020a) Economic crisis as a consequence COVID-19 virus attack: risk and damage assessment. Quant Financ Econ 4: 274-293.

28. Sukharev OS (2020b) Structural analysis of income and risk dynamics in models of economic growth. Quant Financ Econ 4: 1-18.

29. Sukharev OS (2019) The restructuring of the investment portfolio: the risk and effect of the emergence of new combinations. Quant Financ Econ 3: 390-411.    

30. Tongurai J, Vithessonthi C (2018) The impact of the banking sector on economic structure and growth. Int Rev Financ Anal 56: 193-207.    

31. Välilä T (2020) Infrastructure and growth: A survey of macro-econometric research. Struct Change Econ Dyn 53: 39-49.    

32. Wooldridge JM (2016) Introductory Econometrics: A Modern Approach, 6th Edition, South-Western Cengage Learning, 912.

33. Yıldırım S, Gedikli A, Erdoğan S, et al. (2020) Natural resources rents-financial development nexus: Evidence from sixteen developing countries. Resour Policy 68.

34. Zeira J, Zoabi H (2015) Economic growth and sector dynamics. Eur Econ Rev 79: 1-15.    

35. Zhu X, Asimakopoulos S, Kim J (2020) Financial development and innovation-led growth: Is too much finance better? J Int Money Financ 100: 102083.    

© 2020 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution Licese (http://creativecommons.org/licenses/by/4.0)

Download full text in PDF

Export Citation

Article outline

Show full outline
Copyright © AIMS Press All Rights Reserved