Acta Universitatis Danubius. Œconomica, Vol 14, No 1 (2018)

Abstract

This study examines the interplay between competition, access to finance and economic growth in Brazil, Russia, India, China and South Africa (BRICS). It adds to the ongoing debate on the interdependence that exists among competition, access to finance and economic growth by exploring their causal relationship using the panel Vector Error Correction Model. The results obtained suggest that there is a long run causality running from the access to finance (proxied by interest rate spread) and competition to economic growth. This is not surprising because it is generally expected that the interplay between competition and access to finance has some influence on the growth of any economy. The study did not find any evidence to support any long run causality running from economic growth and competition to access to finance. Neither was there any evidence showing any causal relationship between economic growth and access to finance and competition.