Does Financial Integration Matter During Financial Crises? A Comparative Analysis of Economies of Developing Countries

Besnik Fetai

Prague Economic Papers, 2024, vol. 2024, issue 1, 60-78

Abstract: Using developing countries in Europe for context, this study examines the complex relationship between financial crises and financial integration. We use panel data comprising 37 countries in Europe, including Iceland, Belarus, Ukraine, Turkey, and Russia from 2000-2019 and the general method of moments. Our findings show that there is a positive relationship between financial integration and development and economic growth. In addition, the results suggest that a higher degree of financial integration is not necessarily increasing financial fragility during a financial crisis. Therefore, the results show that it is a self-defeating policy for developing countries to apply a strategy of financial protectionism over a financial crisis.

Keywords: economic growth; financial crisis; financial integration; financial development (search for similar items in EconPapers)
JEL-codes: F33 F36 G15 G21 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.18267/j.pep.850

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