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Political Institutions and Financial Development: An Empirical Study

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  • Huang, Yongfu

Abstract

Summary This paper examines whether political institutional improvement promotes financial development, using a panel dataset of 90 developed and developing countries over 1960-99. The empirical evidence reveals a positive effect of institutional improvement on financial development at least in the short-run, particularly for lower income countries. The preliminary evidence by a before-after event study indicates that a democratic transformation is typically followed by an increase in financial development.

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File URL: http://www.sciencedirect.com/science/article/B6VC6-50BBT14-1/2/43ef941e4fb2bbf276d37af902881a33
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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 38 (2010)
Issue (Month): 12 (December)
Pages: 1667-1677

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Handle: RePEc:eee:wdevel:v:38:y:2010:i:12:p:1667-1677

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: political institutions; financial development; globalization; East Asia; Thailand;

References

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Citations

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Cited by:
  1. Yongfu Huang, 2011. "Private investment and financial development in a globalized world," Empirical Economics, Springer, vol. 41(1), pages 43-56, August.
  2. Stolbov, Mikhail, 2012. "The finance-growth nexus revisited: From origins to a modern theoretical landscape," Economics Discussion Papers 2012-45, Kiel Institute for the World Economy.
  3. Sambit Bhattacharyya & Roland Hodler, 2010. "Do Natural Resource Revenues Hinder Financial Development? The Role of Political Institutions," CSAE Working Paper Series 2010-40, Centre for the Study of African Economies, University of Oxford.
  4. Edgar Demetrio Tovar, 2011. "Globalización financiera y sus efectos sobre el desarrollo financiero," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
  5. Chang, Chun Ping & Berdiev, Aziz N., 2011. "The political economy of energy regulation in OECD countries," Energy Economics, Elsevier, vol. 33(5), pages 816-825, September.
  6. Farla, Kristine, 2012. "Institutions and credit," MERIT Working Papers 038, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Siong Law & W. Azman-Saini, 2012. "Institutional quality, governance, and financial development," Economics of Governance, Springer, vol. 13(3), pages 217-236, September.
  8. Thorsten Beck & Samuel Munzele Maimbo, 2013. "Financial Sector Development in Africa : Opportunities and Challenges," World Bank Publications, The World Bank, number 11881, October.
  9. Conor O'Toole & Carol Newman, 2012. "Investment Financing and Financial Development: Firm Level Evidence from Vietnam," The Institute for International Integration Studies Discussion Paper Series iiisdp409, IIIS.
  10. Anwar, Sajid & Cooray, Arusha, 2012. "Financial development, political rights, civil liberties and economic growth: Evidence from South Asia," Economic Modelling, Elsevier, vol. 29(3), pages 974-981.
  11. Law, Siong Hook & Singh, Nirvikar, 2014. "Does too much finance harm economic growth?," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 36-44.
  12. Katsushi S. Imai & Raghav Gaiha & Ganesh Thapa & Samuel Kobina Annim & Aditi Gupta, 2012. "Financial Performance of Microfinance Institutions-A Macroeconomic and Institutional Perspective," Discussion Paper Series DP2012-04, Research Institute for Economics & Business Administration, Kobe University.
  13. Chang, Chun-Ping & Berdiev, Aziz N. & Lee, Chien-Chiang, 2013. "Energy exports, globalization and economic growth: The case of South Caucasus," Economic Modelling, Elsevier, vol. 33(C), pages 333-346.

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