This study examines the impact of institutional and market-based financial development on economic growth across different quantiles for the Next-11 countries between 1990 and 2021. Employing the panel quantile autoregressive distributed lag (P-QARDL) model, this study captures both short-run and long-run effects while accounting for heterogeneity across countries and growth levels. The empirical findings highlight the significant role of regulatory quality and control of corruption in fostering long-term economic growth, with both factors demonstrating a positive and consistent relationship with GDP growth. However, the rule of law negatively affects economic growth in countries with lower growth rates, while this effect weakens economies with higher growth rates. Additionally, financial institutions exhibit a strong positive impact on economic growth, whereas the financial market index has a negative but statistically insignificant effect. These results emphasize the importance of effective governance, strong financial institutions, and adaptive legal frameworks in promoting sustainable economic growth. The study provides policy recommendations for strengthening institutional frameworks and financial systems tailored to different stages of economic development.
Büşra Ağan (Sat,) studied this question.