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Financial Harmonization and Financial Development: An Application of Europe’s Financial Services Action Plan

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  • Zeynep Ozkok

Abstract

The Financial Services Action Plan (FSAP) of the European Commission intends to create an open, secure, integrated financial market across EU countries. Using principal component analysis to construct financial development indices, we investigate the impact of financial harmonization policies of the FSAP on financial development in a panel of 25 EU countries for 1996-2007. Taking into account the timing perspective in implementing the FSAP directives across countries we find a positive link between financial harmonization and financial development. The results are robust to different approaches in constructing the harmonization index and the addition of further controls.

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  • Zeynep Ozkok, 2016. "Financial Harmonization and Financial Development: An Application of Europe’s Financial Services Action Plan," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot GmbH, Berlin, vol. 62(1), pages 1-35.
    • Handle: RePEc:dah:aeqaeq:v62_y2016_i1_q1_p1-35
    DOI: 10.3790/aeq.62.1.1
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    Cited by:

    1. Franziska Bremus & Tatsiana Kliatskova, 2018. "Legal Harmonization, Institutional Quality, and Countries' External Positions: A Sectoral Analysis," Discussion Papers of DIW Berlin 1768, DIW Berlin, German Institute for Economic Research.
    2. Bremus, Franziska & Kliatskova, Tatsiana, 2020. "Legal harmonization, institutional quality, and countries’ external positions: A sectoral analysis," Journal of International Money and Finance, Elsevier, vol. 107(C).
    3. Bremus, Franziska & Kliatskova, Tatsiana, 2020. "Legal harmonization, institutional quality, and countries’ external positions: A sectoral analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 107.

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    More about this item

    Keywords

    Financial integration; European Union; FSAP; Legal; regulatory harmonization; Financial development; Principal component analysis;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G2 - Financial Economics - - Financial Institutions and Services
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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