A Study of The Impact of Financial Development on the Country¡¯s Monetization

Hao Liu and Shijin Chen

International Journal of Social Science Studies, 2016, vol. 4, issue 4, 69-77

Abstract: Based on dynamic panel data from 45 countries, this article makes an empirical analysis of the determinants of M2/GDP ratio. It reveals that indirect financing dominated by banking system and direct financing dominated by financial markets jointly contribute to the rise of the M2/GDP ratio of a country, while the improvement of efficiency of banking industry and securities market helps reduce it. Finally it offers some suggestions on upgrading China¡¯s financial market and structure in terms of promoting its financial efficiency, innovation and reform.

Keywords: monetization; financial structure; determinant; empirical analysis (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:rfa:journl:v:4:y:2016:i:4:p:69-77

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