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Structural Domestic Conditions, Regional and International Financial Integrations: Evidence from the MENA

Author

Listed:
  • Özmen Erdal

    (Department of Economics, Middle East Technical University, Ankara, Türkiye)

  • Taşdemir Fatma

    (Department of International Trade and Business, Sinop University, Sinop, Türkiye)

Abstract

This paper investigates the effects of international (IFI) and regional financial integrations (RFI) on structural domestic conditions represented by financial development and governance in Middle East and North Africa economies (MENA) during the 1992–2020 period. The generalized method of moments estimation results suggest that too much IFI deters while higher levels of RFI, measured based on bilateral financial flows, promote financial development. High levels of IFI and RFI both tend to be positively associated with institutional quality and governance. The empirical findings in this paper propose that MENA economies should engage in structural reforms, encompassing liberalization of capital accounts, eliminating barriers to regional financial integration, enhancing the institutional environment and financial development. In this vein, policymakers may be suggested to formulate strategies with the goal of maximizing the beneficial effects of both international and regional financial integrations.

Suggested Citation

  • Özmen Erdal & Taşdemir Fatma, 2025. "Structural Domestic Conditions, Regional and International Financial Integrations: Evidence from the MENA," Review of Middle East Economics and Finance, De Gruyter, vol. 21(3), pages 245-267.
    • Handle: RePEc:bpj:rmeecf:v:21:y:2025:i:3:p:245-267:n:1002
    DOI: 10.1515/rmeef-2025-0006
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    Keywords

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    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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