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Financial development, trade openness and financial openness: do income levels matter for developing countries?

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  • Simplice A, Asongu

Abstract

Using a panel of 29 African middle and low income countries with data spanning from 1988 to 2007, we analyze linkages between openness and financial intermediary development when income levels matter. Main findings are four: firstly, openness in the last two decades has not been the effect of growth and welfare, but of structural adjustment policies imposed by the IMF and World Bank; secondly, but for the positive impact of trade openness on the financial depth of low income countries, openness in sampled countries fail to bring about financial intermediary development; thirdly, financial openness brings trade openness for both income levels, but the reverse is true only for middle income countries; lastly, low income countries will benefit more from trade openness through financial deepening and financial openness than their middle income counterparts.

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  • Simplice A, Asongu, 2010. "Financial development, trade openness and financial openness: do income levels matter for developing countries?," MPRA Paper 27441, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:27441
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    References listed on IDEAS

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    Cited by:

    1. Simplice Anutechia Asongu, 2012. "Bank Efficiency and Openness in Africa: Do Income Levels Matter?," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 4(2), pages 115-122, December.

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    More about this item

    Keywords

    Openness; financial intermediary development; income levels; panel; Africa.;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • A10 - General Economics and Teaching - - General Economics - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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