Openness, Institutions and Financial Development

Siong Hook Law and Panicos Demetriades

No 12, WEF Working Papers from ESRC World Economy and Finance Research Programme, Birkbeck, University of London

Abstract: Using dynamic panel data techniques and data from 43 developing countries during 1980 – 2001, we provide evidence which suggests that openness and institutions are important determinants of financial development. Openness, in terms of trade and capital flows, is particularly potent in promoting financial development in middle-income countries, but much weaker in low-income countries. Our findings are robust to alternative measures of financial and trade openness, as well as estimation method and sample period.

JEL-codes: F19 G29 (search for similar items in EconPapers)
Date: 2006-05
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Citations: View citations in EconPapers (41)

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Working Paper: Openness, Institutions and Financial Development (2005)
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