Financial Harmonization and Financial Development: An Application of Europe’s Financial Services Action Plan

Zeynep Ozkok

MPRA Paper from University Library of Munich, Germany

Abstract: The Financial Services Action Plan (FSAP) of the European Commission intends to create an open, secure, integrated financial market across EU member countries. Although recent research has shown a positive impact of the FSAP directives on cross-border lending and industrial growth, the effect on financial development remains to be examined. Using principal component analysis to construct financial, banking sector, bond and stock market development indices, we investigate the impact of financial harmonization policies of the FSAP on financial development in a panel of twenty five EU member states for the period of 1996 – 2007. Taking into account the timing perspective in implementing the FSAP directives across countries we find a positive link between financial harmonization and financial development. The results are shown to be robust to different approaches in constructing the harmonization index and the harmonization difference (relative timing of adoption) variable, and adding further controls and years to account for the recent period.

Keywords: Financial integration; European Union; FSAP; Legal, regulatory harmonization; Financial development; Principal component analysis (search for similar items in EconPapers)
JEL-codes: F36 F63 G2 K4 O11 O19 (search for similar items in EconPapers)
Date: 2013-05-23, Revised 2014-09-25
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/58866/1/MPRA_paper_58866.pdf original version (application/pdf)

Related works:
Journal Article: Financial Harmonization and Financial Development: An Application of Europe’s Financial Services Action Plan (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58866

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter (winter@lmu.de).