Özet:

The main purpose of this paper is to investigate the relationship between financial development and economic growth, based on European transition economies. For this purpose we used Barro (1991) type growth model which claimed that finance is a key to economic growth. The model includes real gross domestic product (GDP) and composite index of financial development (FD). At the empirical model, scope of the panel data analysis, primarily the heterogeneity of variables were investigated and then the cross-section dependency was examined. Also, stability of the series was tested with the second-generation unit root tests. After the existence of the co-integration relationship between the series, long term regression parameters were examined. According to the empirical results, in the long term, it is expected that there is a one way relationship from financial development to growth.

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