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The Impact of Financial Openness on Economic Integration: Evidence from the Europe and the Cis

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Author Info

  • Fabrizio Carmignani

    ()
    (Economic Analysis Division, United Nations Economic Commission for Europe (UNECE))

  • Abdur Chowdhury

    ()
    (Economic Analysis Division, United Nations Economic Commission for Europe (UNECE))

Abstract

We study whether financial openness facilitates the economic integration of formerly centrally planned economies with the EU-15. Two dimensions of economic integration are considered: cross-country convergence of per-capita incomes and bilateral trade in goods and services. We find that more financially open economies effectively catch-up faster and trade more with the EU-15. These integrationenhancing effects occur over and above any effect stemming from domestic financial deepening and other factors determining growth and trade.

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File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper88.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 88.

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Length: 22 pages
Date of creation: Apr 2005
Date of revision: Apr 2005
Handle: RePEc:mib:wpaper:88

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Keywords: Economic integration; financial openness; gravity models; catching-up;

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References

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