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Source: Journal Citation ReportsTM from ClarivateTM 2022

Entrepreneurship and Sustainability Issues Open access
Journal Impact FactorTM (2022) 1.7
Journal Citation IndicatorTM (2022) 0.42
Received: 2021-11-15  |  Accepted: 2022-01-13  |  Published: 2022-03-30

Title

Financialization: curse or salvation? The case of Latvia, a small and post-transition economy


Abstract

The role of financial sector has increased significantly since the 1980s, introducing a new term or phenomenon i.e. the financialization of the economy. There is still some imprecision about the nature and dynamics of financialization, including its impact on the economy. The main task of the financial sector is to allocate funds for its most productive use, while ensuring sustainable development. Recent studies show that excessive financial deepening negatively impacts the economies of developed countries, but is this true for posttransition economies? The aim of this paper is to look into the relationship between financialization and the state of a small and posttransition economy, the Latvian economy. Using a European database and methodological framework we analyze this relationship in Latvia between 1999Q1 and 2017Q4. In our study, we apply the standard Vector Auto-Regressive model (VAR). Our research results do not indicate that financialization causes significant changes in the state of the Latvian economy. The interpretation of this result is related to the degree of financial deepening in Latvia.


Keywords

financialization, post-transition economy, sustainable development, small and open economy, economic policy


JEL classifications

G20 , F63 , F65 , F43 , P20


URI

http://jssidoi.org/jesi/article/943


DOI


Pages

173-197


Funding

The article is part of a research project financed by the National Science Centre, Poland (grant No. UMO 2017/26/D/HS4/00954). This research was funded partially by the National Science Centre, Poland, grant number UMO2017/26/D/HS4/00954. As well as the project grant lzp-2020/2-0061 from the Latvian Council of Science.

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Stawska, Joanna
University of Lodz, Lodz, Poland https://www.uni.lodz.pl
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Rupeika-Apoga, Ramona
University of Latvia, Riga, Latvia http://www.lu.lv
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Malaczewski, Maciej
University of Lodz, Lodz, Poland https://www.uni.lodz.pl
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Czechowska, Iwona Dorota
University of Lodz, Lodz, Poland https://www.uni.lodz.pl
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Sol Murta, Fatima
University of Coimbra, Coimbra, Portugal https://www.uc.pt
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Journal title

Entrepreneurship and Sustainability Issues

Volume

9


Number

3


Issue date

March 2022


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

HTML views: 1941  |  PDF downloads: 809

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