Economics at your fingertips  

Openness and financial development: time series evidence for Turkey

Senay Acikgoz (), Mehmet Balcilar and Bedriye Saracoglu

International Journal of Banking, Accounting and Finance, 2012, vol. 4, issue 2, 172-201

Abstract: Our study investigates whether trade openness and financial openness have significant impact on financial development using time series data on Turkey for the 1989:1-2007:2 periods. We also investigate Rajan and Zingales (2003) hypothesis that both trade and capital accounts should be simultaneously liberalised in order to achieve financial development. We use four different financial development indicators, commonly employed in the previous literature. The bounds testing and autoregressive distributed lag approaches to cointegration, developed by Pesaran et al. (2001) are used in the estimation process. The empirical findings indicate that all financial development measures show a long-run levels relationship with financial openness, trade openness and real GDP. Consequently, our estimates imply that both financial and trade openness have led to financial development in Turkey. The findings also support the hypothesis of Rajan and Zingales (2003). Marginal effects of financial and trade openness on the financial development indicators imply that Turkey may benefit from trade openness and/or liberalised capital accounts.

Keywords: financial development; financial openness; trade openness; bounds testing approach; Turkey; real GDP; gross domestic product; liberalisation; capital accounts; trade accounts. (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

Related works:
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:

Access Statistics for this article

More articles in International Journal of Banking, Accounting and Finance from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().

Page updated 2024-03-31
Handle: RePEc:ids:injbaf:v:4:y:2012:i:2:p:172-201