Financial Development, Openness and Institutions: Evidence from Panel Data

WEF Working Paper No. 0022

35 Pages Posted: 31 Oct 2007

See all articles by Badi H. Baltagi

Badi H. Baltagi

Syracuse University - Maxwell School of Citizenship and Public Affairs; IZA Institute of Labor Economics; Syracuse University - Center for Policy Research

Panicos Demetriades

University of Leicester - Department of Economics

Siong-Hook Law

University Putra Malaysia - Department of Economics

Date Written: May 2007

Abstract

Utilising four annual panel datasets and dynamic panel data estimation procedures we find that trade and financial openness, as well as economic institutions are statistically important determinants of the variation in financial development across countries and over time since the 1980s. However, we find mixed support for the hypothesis that the simultaneous opening of both trade and capital accounts is necessary to promote financial development in a contemporary setting.

Keywords: financial development, trade openness, financial openness, economic institutions, financial liberalization, dynamic panel data analysis

JEL Classification: F19, G29

Suggested Citation

Baltagi, Badi H. and Demetriades, Panicos O. and Law, Siong-Hook, Financial Development, Openness and Institutions: Evidence from Panel Data (May 2007). Available at SSRN: https://ssrn.com/abstract=1026323 or http://dx.doi.org/10.2139/ssrn.1026323

Badi H. Baltagi (Contact Author)

Syracuse University - Maxwell School of Citizenship and Public Affairs ( email )

400 Eggers Hall
Syracuse, NY 13244
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States
315-443-1630 (Phone)
315-443-1081 (Fax)

HOME PAGE: http://www.maxwell.syr.edu/cpr_about.aspx?id=6442451316

Panicos O. Demetriades

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom
+ 44 116 252 2835 (Phone)
+ 44 116 252 2908 (Fax)

HOME PAGE: http://www.le.ac.uk/economics/staff/pd28.html

Siong-Hook Law

University Putra Malaysia - Department of Economics ( email )

Selangor Darul Ehsan
Serdang, Selangor 43400
Malaysia

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