The impact of financial system indicators on economic growth in China, India and a number of other countries

Aim. The work is aimed to study the relationship between economic growth rates and financial system indicators in China, India, the remaining original BRICS countries, the Association of Southeast Asian Nations (ASEAN), a number of Western countries, as well as to calculate threshold values and the structure of the financial system that induces the economic growth. Objectives. In order to achieve this goal, it is necessary to collect and calculate a data panel from a number of countries and regions containing information on their economic growth rates and the state of their financial systems (the latter are represented by indicators of the stock market and the banking system); analyze the data through visual analysis, in particular, construct scatter diagrams and frequency histograms; conduct statistical analysis, that is, calculate correlation coefficients, construct clusters and conduct their meta-analysis; formulate a conclusion on the optimal combination and level of stock market factors, the banking system that contributes to economic growth. Methods. The primary data analysis was performed using scatter diagram matrices and frequency histograms. A correlation analysis was performed to summarize the main characteristics of the data panel. The main research method was K-means clustering and meta-analysis of the results. Results. A data panel was compiled, supplemented and calculated, to include 17 countries (Russia, Brazil, Germany, Hong Kong, Israel, India, Indonesia, China, Malaysia, Singapore, USA, Thailand, Turkey, the Philippines, South Africa, South Korea, and Japan), ten economic variables (four variables characterizing banking systems, that is, the relative extent of bank deposits, broad money supply, central bank assets and internal loans to the private sector; four variables characterizing the securities market, in particular, stock price volatility, stock market turnover, the size of stock and stock market trading volume to gross domestic product (GDP); two variables characterizing economic growth, that is, the annual growth rate of GDP per capita (purchasing power par, PPP, 2021), and the weighted average annual growth rate of GDP per capita (PPP, 2021) from 1996 to 2020. This panel was used to conduct a cluster analysis, and based on its metadata, reasonable conclusions were made. Conclusions. The cluster meta-analysis showed that the maximum positive effect of the financial system on the economy is achieved when the relative size of deposits and loans in the economy is at the GDP level, and downward or upward deviations from this level induce a slowdown in the economy. A similar effect is noted when central bank assets exceed 10 % of GDP. The stock market turnover should be greater than 100 %, and no positive effect on the economy is registered before this threshold is exceeded, while stock market volatility as a whole does not affect economic growth. It was established that the negative effect of exceeding the threshold value of the relative size of loans is significantly reduced, provided that the stock market turnover is in the optimal range.