engleski

The role of financial system in the process of economic growth – case of Croatia

A number of studies provide evidence that financial system is associated with economic growth. Financial development facilitates investment, which is important source of growth, and it also contributes to more efficient allocation and use of rare capital resources. In line with large recent literature, there is a positive link between the sophistication and effectiveness of the financial sector and the performance of the economy as a whole. For many emerging markets and developing countries, for example the Republic of Croatia, emphasis must be placed on improving the functioning of financial sector issues. The main result of our research will be that Croatia has to encourage development of financial sector and domestic capital market in order to enhance Croatian economy and to enable the higher rates of economic growth.

financial system; financial development; economic growth; Croatia

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