Eurasian Journal of Business and Economics

ISSN Print: 1694-5948 http://www.ejbe.org ISSN Electronic : 1694-5972

REFEREES REPORT
TITLE: Banking Sector Development and Economics Growth in Central and

Southeastern Europe Countries

Manuscript ID: EJBE-11-09214-01

Review Due Date: March 01, 2012

Please circle one answer for each of the following questions and the overall recommendation.

General Judgment
1. 2. 3. 4. 5. 6. 7. 8. 9.
The author is familiar with the existing state of knowledge. The topic is relevant to the scope of EJBE. This is a new and original contribution. The title is appropriate. The abstract and keywords are adequate. The paper is logically and technically correct. The interpretations and conclusions are sound and justified by the results. The paper is well presented and organized. The writing style/English is clear and understandable

False

Rather False 2

Rather True 4

True

1 1 1 1 1 1

2 2 2 2

3 3 3 3

4 4 4 4 4

5 5 5 5 5

1 1

3 3

4 4

5 5

10. The paper is of the right length.

If not, please explain:

11. The references are adequate.

12. Rating of this paper in comparison to similar papers published in top-rated scientific journals: Below publication level Below average Above average

Bottom 20%

Average

Top 20%

Overall Recommendation

4. Acceptable without any changes 3. Acceptable with minor modifications 2. Major revision: needs to be re-written and re-evaluated

Eurasian Journal of Business and Economics

ISSN Print: 1694-5948 http://www.ejbe.org ISSN Electronic : 1694-5972

1. Unacceptable

Please give detailed comments on the following page to justify your general judgment and recommendation. Detailed Comments
This paper empirically examines the relationship between banking sector development and economic growth in 16 transition countries in Central and South-eastern Europe in the period from 1995 to 2010. Employing fixed-effects panel model and control for other relevant determinants of economic growth and endogeneity, the author(s) report the amount of bank credit allocated to the private sector does not speed up economic growth in transition countries. The paper provides no major contribution to the literature on banking sector development and economic growth, or minor contribution, if any. The literature on the banking sector development and economic growth is rich as documented in the literature section provided by the authors. There are plenty of prior research examined for the banking sector development and economic growth both Asia, and other developing markets. Moreover, what have we really learned from the current investigation? The findings are extremely intuitive, potentially specific to the specific area of the world, and possibly specific to the exact marketplace in which the data was collected. The author(s)s result reported only the amount of bank credit allocated to the private sector does not speed up economic growth in transition countries. This is a weak conclusion. Major comments The introduction needs to be revised significantly. It merely presents the definitions and knowledge on the banking sector development and economic growth that are generally well-known to the reader. The author(s) do not provide a motivation of the paper as to why it is important to examine for the 16 countries in Central and South- Eastern Europe? Is there any unique characteristic of the 16 countries in Central and South- Eastern Europe and their financial industry and banking sector? What is the rationale in choosing 1995-2010? Since 1995, have the 16 countries in Central and South- Eastern Europe experienced structural break such as recent real estate bubbles and other previous financial crisis? The motivation of the paper will be strengthened if the author(s) discuss other techniques critically. The authors should mention the contributions of the study in the introduction and emphasize the main results which have not been detected so far. The author(s) should provide a section discussing the economy, financial industry especially the banking sector of the 16 countries in Central and South- Eastern Europe. The literature review should be done more carefully. It should not only be a list of what previous studies have done, there should also be some analysis and conclusions in it and should include the most recent studies. The literature review should skip the historical

Eurasian Journal of Business and Economics

ISSN Print: 1694-5948 http://www.ejbe.org ISSN Electronic : 1694-5972

development and concentrate on the current literature documenting the relationship between the banking sector and economic growth and development. The author(s) should mention what other methods that could be used to study banking sector development and economic growth and are there any substitutes for the author(s)s method. The results should be compared with the previous studies and especially with the ones that study the 16 countries in Central and South- Eastern Europe. At various places throughout the paper, the write-up of this paper is merely a repetition of others' published works. The author(s) borrow substantially from Koivu 2002. Total revision of the conclusions -section is recommended as the results are under interpreted. The author(s) should consider again their policy implications and concentrate only to what their results lead to conclude and especially write again the conclusions. Careful note to make recommendations that do not follow from the results. Minor comments 1. 2. The author(s) should be more careful with their mathematical notation, for example with the use of subscripts notations. In Tables 1 to 4, the data should be in decimals. The author(s) should check these results and should present their results with a maximum of 3 or 4 decimals in estimations. The abstract should be written again

3.

4. The language structure of the study should be improved. The writing is choppy at times and spelling irregularities throughout the paper. I have provided further comments and suggestions on the paper to the author(s) to improve the paper.