Sammanfattning

This paper re-examines the nexus between financial development and openness in developing countries. Specifically, we test whether both financial and trade openness explain financial development and its variations across 44 developing economies. Questioning the functional specifications in previous studies, we propose a fully nonparametric modelling approach to validate the simultaneous openness hypothesis. Our findings from the parametric approach suggest that both openness dimensions positively impact financial development, providing a loose support for the simultaneous openness hypothesis. The results based on the nonparametric approach suggest a negative effect of closed economies (economies with relatively closed trade and capital accounts) on financial development, supporting the strong version of the simultaneous openness hypothesis. Correct model specification test results support the nonparametric model relative to the parametric model as appropriate for the sampled data. Our conclusion is therefore based on the nonparametric finding, which supports the simultaneous openness hypothesis for the selected developing countries.

Nyckelord

financial development; financial openness; trade openness; nonparametric analysis; developing countries

Publicerad i

Journal of Applied Economics
2017, Volym: 20, nummer: 2, sidor: 373-394
Utgivare: UNIV CEMA

SLU författare

• Marbuah, George

  • Institutionen för ekonomi, Sveriges lantbruksuniversitet
    

Globala målen

SDG17 Stärka genomförandemedlen och återvitalisera det globala partnerskapet för hållbar utveckling


UKÄ forskningsämne

Nationalekonomi


Publikationens identifierare

DOI: https://doi.org/10.1016/S1514-0326(17)30017-X

Permanent länk till denna sida (URI)

https://res.slu.se/id/publ/93251