Financial Structure and Its Influence on Economic Growth and Investment Stability
Yury A. Danilov – Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Alina V. Podlesnaya – Graduate of the Master’s program «Economic Policy», Faculty of Economics of the Lomonosov Moscow State University (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
The article examines the influence of the financial structure on the volatility of economic growth and on the volatility of the dynamics of fixed capital investments. Based on the analysis of the literature, a hypothesis was formulated that in economies with a market-based financial sector, macroeconomic volatility is lower. This hypothesis was confirmed within the framework of regression equations in which the dependent variables were the standard deviation of the annual growth rates of real GDP per capita and the standard deviation of the annual growth rates of fixed capital investments. The banking segment increases the volatility of macroeconomic parameters, while non-bank financial institutions and financial markets reduce it.
At the same time, the significance of the influence of financial structure indicators on the volatility of macroeconomic parameters turned out to be lower than the significance of the indicators of volatility of the terms of trade and investment openness. However, given that the optimization of the financial structure is available to the authorities implementing economic policy and does not have negative consequences, it can be a very effective tool for protecting against the impact of external shocks on the Russian economy.
Key words: financial structure, GDP, volatility of economic dynamics, investment volatility, financial sector, mitigation of external shocks, banking segment, financial markets, non-bank financial institutions.
