Financial system efficiency as a determinant of economic growth: empirical evidence from Latin American economies
DOI:
https://doi.org/10.70577/asce.v5i3.1055Keywords:
Latin America, Economic analysis, Economic growth, Financial statistics, InflationAbstract
Economic growth in Latin America varies significantly across countries, despite their shared structural challenges; in this context, financial system efficiency plays a crucial role due to its capacity to channel resources into investment and strengthen productive activity. This research aimed to analyze the influence of financial system efficiency on the economic growth of Argentina, Bolivia, Colombia, Ecuador, Mexico, and Peru during the 2017–2024 period. A quantitative approach with an explanatory scope was adopted, utilizing data from the World Bank. The analysis incorporated descriptive statistics, correlations, Principal Component Analysis (to construct a financial efficiency index), and a multicollinearity assessment using the Variance Inflation Factor, all supported by RStudio software. Colombia and Peru recorded the highest average levels of economic growth, while Argentina showed the weakest performance; Bolivia stood out for having the highest level of private credit relative to GDP, and Argentina achieved the highest index of financial efficiency. Correlations revealed a link between private sector credit and lower unemployment levels, although higher financial efficiency did not guarantee superior economic growth; furthermore, the analysis confirmed significant heterogeneity in the financial structures of the economies studied. Financial efficiency is a key factor in economic performance, though its impact depends on institutional, macroeconomic, and productive conditions; strengthening the financial system requires complementing stability with policies that boost investment and productivity to foster sustainable economic growth.
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Copyright (c) 2026 Sonnia Soraya Urbina Bustos , Jose Erick Nelson Choque Mamani , Eliceo Hernando Garcia Sarria , Gabriel Esteban Heredia Villarroel , Cristhian Jesús Hernández Cervantes
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