This report provides empirical evidence on the relationship between financial development and economic growth in the European Union and the Euro area. Results indicate that the type of financing fund receiver matters in the financial depth-growth link.

There is growing evidence that the impact of financial development on economic growth might be non-linear and hump-shaped, exhibiting a turning point. However, such findings are typically established using total finances (mostly: credit), and the apparent non-linear impact of totals can stem...