RETAIL PAYMENT AND ECONOMIC GROWTH FOR DEVELOPED AND EMERGING EUROPEAN COUNTRIES

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By: Aniela BOJAN, Emilia-Anuta COROVE, Ioan TRENCA
JEL: C23, G01, G21
Keywords: Economic growth, retail payment system, random effects

The purpose of this article is to identify the retail payment instruments that influence the economic growth. The present paper contributes to the strand of literature by showing the impact of payment market infrastructure from this new perspective.  For this purpose we developed a panel framework consisting of 26 European countries that captures the relationship between economic growth and retail payment instruments. In order to analyze the impact of retail payments instruments we used a Panel Regression Model. The retail payment instruments used are: cash, all cards, direct debit, credit transfers and cheques. We find that these instruments have a positive impact on economic growth, with cash exception. The greatest impact on economic growth for developed countries it have cheques and for emerging countries it have cards.