The impact of financial systems on economic growth

Abstract

The article aims to determine the level of impact of the financial sector on economic growth. The financial sector’s activities provide financing for business development, provide borrowing opportunities and provide comprehensive protection when concluding insurance contracts, which in the long run ensures economic growth. It is essential to understand which financial sector activities are most significant in economic growth. Borrowing and equity trading have been found to positively impact economic growth, while the market capitalisation of companies has been found to harm economic growth. The results can be used to develop growth plans for financial institutions that promote economic development.