Banking Sector Openness and Economic Growth

Nihal Bayraktar and Yan Wang
Additional contact information
Nihal Bayraktar: Nihal Bayraktar is at the School of Business Administration, Pennsylvania State University-Harrisburg, and the World Bank; e-mail: nxb23@psu.edu
Yan Wang: Yan Wang is Senior Economist, The World Bank Group, Washington D.C., USA; e-mail: ywang2@worldbank.org

Margin: The Journal of Applied Economic Research, 2008, vol. 2, issue 2, 145-175

Abstract: Banking sector openness may directly increase growth by improving the quality of financial services and increasing funds available, or indirectly by improving the efficiency of financial intermediaries, both of which may reduce the cost of financing, in turn, increase capital accumulation and economic growth. The objective of this paper is to empirically reinvestigate these direct and indirect links, using a more advanced econometric technique (generalised method-of-moments [GMM] dynamic panel estimators). An illustrative model is presented to link financial market development with investment. The empirical results support the presence of direct and indirect links, thus encouraging countries planning to open their financial markets.

Keywords: Banking Sector Openness; Capital Accumulation; Economic Growth; Efficiency of Banks; Foreign Banks; JEL Classification: G21; JEL Classification: O16; JEL Classification: O40; JEL Classification: F10; JEL Classification: F21 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/097380100800200201 (text/html)

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: https://EconPapers.repec.org/RePEc:sae:mareco:v:2:y:2008:i:2:p:145-175

DOI: 10.1177/097380100800200201

Access Statistics for this article

More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research
Bibliographic data for series maintained by SAGE Publications ().