Financial Liberalization, Banking Crises and Growth: Assessing the Links

Alessandra Bonfiglioli (alessandra.bonfiglioli@unibg.it) and Caterina Mendicino

No 567, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract:

This paper studies the effects of financial liberalization and banking crises on growth. It shows that financial liberalization spurs on average economic growth. Banking crises are harmful for growth, but to a lesser extent in countries with open financial systems and good institutions.

The positive effect of financial liberalization is robust to different definitions. While the removal of capital account restrictions is effective by increasing financial depth, equity market liberalization affects growth directly.

The empirical analysis is performed through GMM dynamic panel data estimations on a panel of 90 countries observed

in the period 1975-1999.

Keywords: Capital account liberalization; equity market liberalization; financial development; institutions; dynamic panel data (search for similar items in EconPapers)
JEL-codes: C23 F02 G15 O11 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2004-10-21
New Economics Papers: this item is included in nep-fin, nep-ifn and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Downloads: (external link)
http://swopec.hhs.se/hastef/papers/hastef0567.pdf (application/pdf)

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:hhs:hastef:0567

Access Statistics for this paper

More papers in SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Helena Lundin (helena.lundin@hhs.se).