OPENNESS AND FINANCIAL DEVELOPMENT IN CENTRAL AND EASTERN EUROPEAN COUNTRIES

Yilmaz Bayar, Fatma Akyuz and Isil Erem
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Yilmaz Bayar: Usak University, Turkey
Fatma Akyuz: Usak University, Turkey
Isil Erem: Usak University, Turkey

Studies in Business and Economics, 2017, vol. 12, issue 3, 5-16

Abstract: Great numbers of countries have made the limitations loose on the transnational goods, services and capital flows and begun to follow a policy of export-oriented growth. Total value of global financial asset flows exceeded the value of global trade over time and financial markets have experienced considerable expansions in almost every country. This paper investigates the interaction between openness and financial development in 9 Central and Eastern European countries during 1996-2014 period employing cointegration test of Westerlund and Edgerton (2007) and causality test of Dumitrescu and Hurlin (2012). We reached that openness affected financial sector development positively in the long term. Furthermore, there was one-way causality from financial openness to financial sector development.

Keywords: Financial openness; trade openness; financial sector development; panel data analysis (search for similar items in EconPapers)
Date: 2017
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