Volume 24, Issue 4 (Winter 2020)
JPBUD 2020, 24(4): 3-42 |
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1- Department of Economics, Tarbiat Modares University, Tehran, Iran.
2- Department of Economics, Tarbiat Modares University, Tehran, Iran , m.zolfaghari@modares.ac.ir
3- Tarbiat Modares University, Tehran, Iran.
2- Department of Economics, Tarbiat Modares University, Tehran, Iran , m.zolfaghari@modares.ac.ir
3- Tarbiat Modares University, Tehran, Iran.
Abstract: (5198 Views)
Given the importance of financial development to achieve
sustainable economic growth, the main objective of this study is to investigate the effect of economic openness (financial and trade openness) on financial development (with emphasis on institutional components) in two groups of oil and non-oil developing countries. In this regard, the Panel ARDL method has been used for the period 2000-2017. The estimated results indicate a positive and significant effect of financial openness on financial development in the oil developing countries and its negative and significant impact on financial development of the non-oil developing countries in the long run. Also, the results show that trade openness has a significant and positive effect on financial development in non-oil developing countries in the long run. While the relationship of trade openness with financial development is statistically meaningless in the oil developing countries. Furthermore, most of the institutional variables in the developing countries have played a positive role in promoting the financial development index in the short-term and long-term. Nevertheless, the effect of these variables on financial development in the non-oil developing countries is very limited in the short-run while it is negative in the long-run.
sustainable economic growth, the main objective of this study is to investigate the effect of economic openness (financial and trade openness) on financial development (with emphasis on institutional components) in two groups of oil and non-oil developing countries. In this regard, the Panel ARDL method has been used for the period 2000-2017. The estimated results indicate a positive and significant effect of financial openness on financial development in the oil developing countries and its negative and significant impact on financial development of the non-oil developing countries in the long run. Also, the results show that trade openness has a significant and positive effect on financial development in non-oil developing countries in the long run. While the relationship of trade openness with financial development is statistically meaningless in the oil developing countries. Furthermore, most of the institutional variables in the developing countries have played a positive role in promoting the financial development index in the short-term and long-term. Nevertheless, the effect of these variables on financial development in the non-oil developing countries is very limited in the short-run while it is negative in the long-run.
Keywords: Financial Development, Financial Openness, Institutional Component, Trade Openness, Panel ARDL.
Type of Study: Applicable |
Received: May 23 2019 | Accepted: Sep 09 2020 | ePublished: Nov 08 2020
Received: May 23 2019 | Accepted: Sep 09 2020 | ePublished: Nov 08 2020
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