Institutional Quality, Trade Openness, and Financial Development in Asia: An Empirical Investigation
24 Pages Posted: 23 Dec 2015
Date Written: September 2015
We examine the determinants of financial development in Asia and the Pacific from 1995 to 2011. To do so, we apply the dynamic generalized method of moments to a panel data set of 26 economies in the region. We find that better governance and institutional quality foster financial development in developing economies while economic growth and trade openness are key determinants of financial depth in developed economies.
Keywords: Asia and the Pacific, economic growth, financial development, governance and institutional quality, panel data analysis, trade openness
JEL Classification: G10, G20
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