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What determines financial development?

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  • Yongfu Huang

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Abstract

This paper studies the fundamental determinants of cross-country differences in finnancial development. Two prominent tools for addressing model uncertainty, Bayesian Model Averaging and Automatic Model Selection using PcGets, are jointly applied to investigate the financial development effects of a wide range of variables taken from various sources. The analysis suggests that the level of financial development in a country is determined by its institutional quality, macroeconomic policies, and geographic characteristics, as well as the level of income and cultural characteristics.

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 05/580.

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Length: 68 pages
Date of creation: Dec 2005
Date of revision:
Handle: RePEc:bri:uobdis:05/580

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Keywords: Financial development; Model uncertainty; Bayesian Model Averaging; PcGets;

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References

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Citations

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Cited by:
  1. Maurizio Iacopetta & Alessandro Giovannini & Raoul Minetti, 2013. "Financial Markets Banks and Growth disentangling the links," Sciences Po publications 2013-13, Sciences Po.
  2. Sai Ding & John Knight, 2011. "Why has China Grown So Fast? The Role of Physical and Human Capital Formation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(2), pages 141-174, 04.
  3. Herwartz, Helmut & Walle, Yabibal M., 2014. "Determinants of the link between financial and economic development: Evidence from a functional coefficient model," Economic Modelling, Elsevier, vol. 37(C), pages 417-427.
  4. Pariwat Kanithasen & Vacharakoon Jivakanont & Charnon Boonnuch, 2011. "AEC 2015: Ambitions, Expectations and Challenges ASEAN's Path towards Greater Economic and Financial Integration," Working Papers 2011-03, Economic Research Department, Bank of Thailand.
  5. Sibel Bali Eryigit, 2010. "FINANCIAL DEVELOPMENT and INSTITUTIONS: A LITERATURE REVIEW," Anadolu University Journal of Social Sciences, Anadolu University, vol. 10(2), pages 111-122, May.
  6. Simplice A, Asongu, 2012. "Financial development dynamic thresholds of financial globalization: evidence from Africa," MPRA Paper 44254, University Library of Munich, Germany.
  7. Hatra Voghouei & M. Azail & Siong Law, 2013. "The effect of dynamic legal tradition on financial development: panel data evidence," European Journal of Law and Economics, Springer, vol. 35(1), pages 109-136, February.
  8. Annabel Vanroose & Bert D’Espallier, 2009. "Microfinance and Financial Sector Development," Working Papers CEB 09-040.RS, ULB -- Universite Libre de Bruxelles.
  9. Yongfu Huang, 2006. "Private investment and financial development in a globalized world," Bristol Economics Discussion Papers 06/589, Department of Economics, University of Bristol, UK.
  10. Edgar Demetrio Tovar García, 2012. "Financial globalization and financial development in Latin America," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID.
  11. Edgar Demetrio Tovar García., 2012. "Financial Globalization and Financial Development in Transition Countries," Economía: teoría y práctica, Economía: teoría y práctica, vol. 36(1), pages 155-178, Enero-Jun.
  12. Angela González Arbeláez & Laura Capera, . "Un índice de bancarización para Colombia," Temas de Estabilidad Financiera 064, Banco de la Republica de Colombia.
  13. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.
  14. Mihasonirina Andrianaivo & Charles Amo Yartey, 2009. "Understanding the Growth of African Financial Markets," IMF Working Papers 09/182, International Monetary Fund.
  15. Edgar Demetrio Tovar, 2011. "Globalización financiera y sus efectos sobre el desarrollo financiero," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
  16. Manoel Bittencourt, 2010. "Financial Development and Economic Growth in Latin America: Schumpeter is Right!," Working Papers 201014, University of Pretoria, Department of Economics.
  17. Barry, Eichengreen, 2011. "The renminbi as an international currency," Journal of Policy Modeling, Elsevier, vol. 33(5), pages 723-730, September.

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