The impact of the openness of trade and finance on financial development: Evidence from emerging markets

Liang Yinghao and Yan Jiajia

Emerging Markets Review, 2025, vol. 65, issue C

Abstract: In this paper, we utilize panel data encompassing 44 emerging market countries from 1996 to 2020 to investigate the impact of openness on financial development and rethink the interrelationship between trade openness and financial openness. Our findings indicate that openness contributes to the promotion of financial development. Furthermore, this paper extends and refines the classification of open relationships by considering three distinct types of policymakers: prudent, radical, and discretionary. Through this categorization, we shed light on the ambiguity of the marginal effects of trade and financial opening policies.

Keywords: Trade openness; Finance openness; Financial development; Emerging markets (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:65:y:2025:i:c:s156601412500010x

DOI: 10.1016/j.ememar.2025.101261

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