Financial liberalization, disaggregated capital flows and banking crisis: Evidence from developing countries

Helmi Hamdi and Nabila Boukef Jlassi ()

Economic Modelling, 2014, vol. 41, issue C, 124-132

Abstract: The aim of this paper is to examine whether financial liberalization has triggered banking crises in some developing countries. We focus in particular on the role of capital flows as their volatilities threat economic stability and growth. In the empirical model, based on panel logit estimation, we use the two common financial liberalization indicators (defacto and dejure) for a panel of 58 developing countries observed during the period 1984–2007. Unlike the previous studies, this paper reveals that both indicators of financial liberalization did not trigger banking crises. However, the results show that foreign debt liabilities to total liabilities and foreign direct investment liabilities to total liabilities increase the likelihood of banking crises.

Keywords: Banking crises; Financial liberalization; Capital FLOWS; Developing countries (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Financial liberalization, disaggregated capital flows and banking crisis: Evidence from developing countries (2014)
Working Paper: Financial liberalization, disaggregated capital flows and banking crisis: Evidence from developing countries (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:41:y:2014:i:c:p:124-132

DOI: 10.1016/j.econmod.2014.05.010

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