What, Why, and How Financial Development Matters: Evidence of ASEAN-5, Asia-5 and OECD-7 Economies

Swee Liang Tan ()
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Swee Liang Tan: Singapore Management University

Chapter Chapter 6 in Economics and Finance Readings, 2022, pp 107-118 from Springer

Abstract: Abstract This paper analyzed the association between bank and capital markets financial development with income per capita in three regions; ASEAN-5 economies (Singapore, Malaysia, Thailand, Philippines, Indonesia), Asia-5 (Japan, China, Hong Kong SAR, South Korea, and India), and OECD-7 (Australia, Canada, Denmark, Norway, Sweden, UK, and US) from 2000 to 2017 using panel data regressions. A key lesson ASEAN-5 can learn from Asia-5 and OECD-7 experience is that bank size does matter despite digital disruptions to their banking system; yet large financial structure that favors banks is negatively associated with Asia-5, and importantly, efficient banking system (not bank size alone) is positively associated with OECD-7 income per capita. The finding has practical policy implications for ASEAN-5’s financial sector liberalization programs that impact the depth, breadth, and efficiency of banks and capital markets.

Keywords: Financial development; Banking system; Capital markets; Economic growth; C23; G20; 016 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-1720-2_6

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DOI: 10.1007/978-981-19-1720-2_6

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