Financial Structure and Macroeconomic Performance in Asian Countries: A Principal Component Analysis Basu Rilina*, Nag Ranjanendra Narayan** *Assistant Professor, Department of Economics, Rabindra Bharati University, Emerald Bower Campus, Kolkata, India, banerjee.rilina@gmail.com **Assistant Professor, Department of Economics, St. Xavier's College (Autonomous), Kolkata, West Bengal, India. rnnag12@gmail.co Online published on 31 May, 2018. Abstract This paper makes an empirical attempt to examine the interrelationship between the financial structure and the macroeconomic performance for selected Asian countries. This paper uses two-stage Principal Component Analysis to examine correlation between measures of performance of the financial system and indicators of macroeconomic performance. The paper shows that there exists positive co-movement between bank and stock market. Moreover, one can think of a composite entity called financial structure standing in conditioning-conditioned relationship with the real sector. This has strong implications for policy perspectives from the point of view of a nation. Top Keywords Financial structure, economic growth, index construction, cross country, PCA. Top |