Neue Publikation von Theocharis Grigoriadis ist in Economic Systems veröffentlicht worden. Volltext ist im FU-Netz verfügbar.

Highlights:

• Nonlinearity in the finance-growth nexus may have deep historical roots.
• Accumulated experience with established statehood transforms the impact of financial development on growth.
• Longer state history negatively affects the finance-growth nexus in post-socialist countries.

Abstract:

In this paper, we analyze the growth effects of state history and financial development in transition economies. We show that accumulated experience with established statehood yields significant results and transforms the impact of finance on growth in East-Central Europe, Southeastern Europe and the former Soviet Union. State history as a proxy for long-run ancestral exposure to institutions, political organization and centralization negatively affects the finance-growth nexus. We argue that a long state history is likely to generate extractive institutions that facilitate the provision of soft budget constraints and thereby impair the finance-growth nexus.