The Determinants of Financial Development: Empirical Evidence from Developed and Developing Countries

Khalfaoui Hamdi

Abstract


Countries which initiate economic development, use in the most cases, the mechanisms and tools of the financial sphere to maximize the chances of success of their financial development process. However, some financial, economic and institutional conditions are compulsory for the success of the whole process. In this context, our empirical analysis using panel data is applied on two samples divided among 15 developed and 23 developing countries over a period from 1997 to 2013.The result obtained show that financial development determinants are mainly related to banking and financial sector and the level of economic and human development for both samples. Whereas, the determinants related to economic stability and the legal and institutional framework have a significant impact on financial development only in the developed countries.


Full Text:

PDF

References


Arteta, C., Eichengreen, B., Wyplosz, C. (2001, March). When does Capital Account Liberalization Help More Than it Hurts? Paper Presented at the conference celebrating Assaf Razin’s 60th Birthday, March 25-26, Tel Aviv University.

Atje, R., & Jovanovic, B. (1993). Stock Markets and Development. European Economic Review, 37, 632-640.

Beck, T., Lunderberg, M., &Majnoni, G. (2001). Financial Intermediary Development and Growth Volatility; do Intermediaries Dampen or Magnify Shocks? World Bank Policy Research.Working Paper.

Becker, G. (1975). Investment in Human Capital: Rates of Return. NBER Chapters, in Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, 2nd ed., 45-144.

Ben-Saada, M., & Khalfaoui, H. (2011). Les conditions du développement des systèmes financiers et leurs effets sur la croissance économique : une approche en données de panel. La Revue des Sciences de Gestion 2011/3 n°249-250. http://dx.doi/10.3917/rsg.249.0021

Busson, F., & Villa, P. (1997). Croissance et spécialisation. Revue Economique, vol. 48, n°6, novembre. http://dx. http://dx.doi/10.2307/3502526

Chinn, M. D., & Ito, H. (2002). Capital Account liberalization, institutions and financial development: Cross Country Evidences. NBER Working Paper Series,8967, June.

Dash, M., & Kabra, G. (2010). The Determinants of Non-Performing Loans Assets in Indian Commercial Bank: A Econometric Study. Middle Eastern Finance and Economics, 7, 94-106.

De Gregorio, J., & Guidotti, P. E. (1995). Financial development and economic growth. World Development, 23-3, pp. 433-448.http://dx. doi/10.1016/0305-750x

Edwards, S. (2001), Capital Mobility and Economic Performance: Are Emerging Economies Different? NBER Working Paper , 8076, January.

Espinoza, R., & Prasad, A. (2010), Non-Performing Loans in the GCC banking systems and their macroeconomics effects. IMF working paper.

Fontagné, L., & Guérin, J. L. (1997). L'ouverture, catalyseur de la croissance. Economie Internationale, 71, 135-167

Frankel, M. (1962). The Production Function in Allocation and Growth: a Synthesis. American Economic Review, 52(5).

Fry, M. J. (1997). In favour of Financial Liberalization. The Economic Journal, May 1997, 107(442), 754-770.

Greenwood, J., & Jovanovic, B. (1990).Financial Development, Growth and the Distribution of Income. Journal of Political Economy, 18(5), 1076-1107. http://dx.doi.org/10.1086/261720

Grossman, G., & Helpman, E. (1990).Comparative Advantage and Long-run Growth. American Economic Review, 80(4), 796-815.

Grossman, G.M., & Yanagawa, N. (1993). Asset bubbles and endogenous growth. Journal of Monetary Economics, Elsevier, 31(1), 3-19.

Hanson, J., & Rocha, R. (1986). High Interest Rate, Spread and the Cost of Intermediation: Two Studies. World Bank Industry and Finance Series, 18.

Johnston, R. B., & Pazarbasioglu, C. (1995). Linkages Between Financial Variables, Financial Sector Reform and Economic Growth and Efficiency. IMF Working Paper .

Kaminsky, G., & Reinhart, C. (1999). The Twin Crises: The Causes of Banking and Balance of Payments Problems. American Economic Review, 89, 473-500. http:dx.doi/10.1257/aer.89.3.473

Klein, M., & Olivei, G. (2000). Capital Account Liberalization, Financial Depth, and Economic Growth. (unpublished; Somerville, Mass: Tufts University).

Laporta, R., De-Silianes, F. L., Shleifer, A., Vishny, R. W. (1996). Law and Finance, NBER, working paper, 5661

Laporta, R., De-silianes, F. L., Shleifer, A., & Vishny, R. W. (1997). Trust in large organizations. American EconomicReview, 87, 333-338

Levine, R., & Zervos, S. (1996). Stock Market, Banks, and Economic Growth, View and Agenda. American Economic Review, 88(3), 537-558. http://dx.doi.org/10.1016/S0304-3932(00)00017-9

McKinnon, R. I. (1991). The Order of Economic Liberalisation: Financial Control in the Transition to A Market Economy. The Johns Hopkins University Press, Baltimore and London, 1st Edition.

Montiel, P. J. (1996). Financial Policies and Economic Growth: Theory, Evidence and Country-Specific Experience from Sub-Saharan Africa. Journal of African Economies, 5(3), 65-98.

Rajan, R. G., & Zingales, L. (2003). The great reversals: the politics of financial development in the twentieth century. Journal of Financial Economics, Elsevier, 69(1), 5-50.

Schultz, T. (1961). Investment in Human Capital. American Economic Review, 51, 1-17.

Schumpeter, J. (1912). Banks, Credit and the Financial System. Historian of Economic. Edited by Moss L, Rutledge, 167-177




DOI: https://doi.org/10.11114/aef.v2i4.894

Refbacks

  • There are currently no refbacks.


Paper Submission E-mail: aef@redfame.com

Applied Economics and Finance    ISSN 2332-7294 (Print)   ISSN 2332-7308 (Online)

Copyright © Redfame Publishing Inc.

To make sure that you can receive messages from us, please add the 'redfame.com' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders. If you have any questions, please contact: aef@redfame.com

-------------------------------------------------------------------------------------------------------------------------------------------------------------