Development of Financial Markets in Central Europe: The Case of the CE4 Countries

34 Pages Posted: 20 May 2011

See all articles by Robert Tchaidze

Robert Tchaidze

International Monetary Fund (IMF); International School of Economics at TSU (ISET); Johns Hopkins University - Department of Economics

Amat Adarov

affiliation not provided to SSRN

Date Written: May 2011

Abstract

Financial markets in the CE4 countries are still shallow compared to other advanced EU countries. While the government bond markets are comparable in size, measured by capitalization in percent of GDP, the private bond, private credit, and equity markets lag behind. Empirical analysis in this paper helps identify factors that explain this phenomenon. We find that the observed differences cannot be explained by macroeconomic variables only, but incorporating indicators of institutional development and external funding eliminates the gap in the case of the equity and private credit markets. However, for the private bond market a significant gap remains even after accounting for these factors.

Suggested Citation

Tchaidze, Robert and Adarov, Amat, Development of Financial Markets in Central Europe: The Case of the CE4 Countries (May 2011). IMF Working Paper No. 11/101, Available at SSRN: https://ssrn.com/abstract=1847334

Robert Tchaidze (Contact Author)

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

International School of Economics at TSU (ISET) ( email )

16, Zandukeli St.
Tbilisi, 0108
Georgia

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States

Amat Adarov

affiliation not provided to SSRN

No Address Available

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