Financial integration and financial development in transition economies: what happens during financial crises?

Arjana Brezigar-Masten (), Fabrizio Coricelli and Igor Masten
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Arjana Brezigar-Masten: Institute for Macroeconomic Analysis and Development
Authors registered in the RePEc Author Service: Arjana Brezigar Masten ()

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This papers provides an empirical analysis of the role of financial development and financial integration in the growth dynamics of transition countries. We focus on the role of financial integration in determining the impact of financial development on growth, distinguishing "normal times" from periods of financial crises. In addition to confirming the significant positive effect on growth exerted by financial development and financial integration, our estimates show that a higher degree of financial openness tends to reduce the contractionary effect of financial crises, by cushioning the effect on the domestic supply of credit. Consequently, the high reliance on international capital flows by transition countries does not necessarily increase their financial fragility. This implies that financial protectionism is a self-defeating policy, at least for transition countries

Keywords: Transition economies; financial integration; financial crises; economic growth; threshold effects (search for similar items in EconPapers)
JEL-codes: F33 F36 G15 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2010-02
New Economics Papers: this item is included in nep-fdg, nep-ifn, nep-opm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://mse.univ-paris1.fr/pub/mse/CES2010/10021.pdf (application/pdf)

Related works:
Working Paper: Financial integration and financial development in transition economies: what happens during financial crises? (2010)
Working Paper: Financial integration and financial development in transition economies: what happens during financial crises? (2010)
Working Paper: Financial integration and financial development in transition economies: What happens during financial crises? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:10021

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