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Financial liberalization and macroeconomic performance, empirical evidence from selected Asian countries

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  • Raza, Muhammad Wajid
  • Mohsin, Hasan M

Abstract

Financially repressed economy cannot grow with an increasing growth rate. That’s why most of the developing countries move toward liberalized financial system. The basic objective of this paper is to provide a comparative analysis of Pakistan, China, and India financial sector liberalization and its impact on macroeconomic performance. This study uses Johansen co integration to provide cross country evidence of long run relationship between macroeconomic variables and financial openness. Results show that there is long run relation among financial openness and macro economic performance in all three countries. Financial liberalization has positive and significant effect on Pakistan macroeconomic performance while negative and significant effect on china economy. The relationship in India is positive but not significant

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 34559.

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Date of creation: 15 May 2011
Date of revision: 12 Oct 2011
Handle: RePEc:pra:mprapa:34559

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Keywords: Financial liberalization; financial depth. Economic growth;

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  1. Reinhart, Carmen & Calvo, Guillermo & Leiderman, Leonardo, 1992. "Capital Inflows and Real Exchange Rate Appreciation in Latin America," MPRA Paper 13843, University Library of Munich, Germany.
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Cited by:
  1. Raza, Muhammad Wajid, 2013. "Affect of financial leverage on firm performance. Empirical evidence from Karachi Stock Exchange," MPRA Paper 50383, University Library of Munich, Germany.

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