Financial Development, Openness and Institutions: Evidence from Panel Data

Badi Baltagi (), Panicos Demetriades () and Siong Hook Law ()

No 07/05, Discussion Papers in Economics from Department of Economics, University of Leicester

Abstract: Utilising four annual panel datasets and dynamic panel data estimation procedures we find that trade and financial openness, as well as economic institutions are statistically important determinants of the variation in financial development across countries and over time since the 1980s. However, we find mixed support for the hypothesis that the simultaneous opening of both trade and capital accounts is necessary to promote financial development in a contemporary setting.

Keywords: Financial development; Trade Openness; Financial Openness; Economic Institutions; Financial Liberalization; Dynamic Panel Data Analysis (search for similar items in EconPapers)
JEL-codes: F19 G29 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn and nep-dev
Date: 2007-05
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Working Paper: Financial Development, Openness and Institutions: Evidence from Panel Data (2007)
Working Paper: Financial Development, Openness and Institutions: Evidence from Panel Data (2007)
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