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Financial openness and financial market development

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  • Tongurai, Jittima
  • Vithessonthi, Chaiporn

Abstract

In this paper, we empirically study the linkages between financial openness and financial development using a sample of 164 countries during 1960–2020. Based on the results of the estimation of systems of equations, we find that the relationship between relative financial openness and relative banking sector development is positive and bidirectional. Likewise, the relationship between relative financial openness and relative stock market development is positive and bidirectional. However, the relationship between relative financial openness and relative bond market development is negative and bidirectional.

Suggested Citation

  • Tongurai, Jittima & Vithessonthi, Chaiporn, 2023. "Financial openness and financial market development," Journal of Multinational Financial Management, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:mulfin:v:67:y:2023:i:c:s1042444x23000014
    DOI: 10.1016/j.mulfin.2023.100782
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    More about this item

    Keywords

    Financial openness; Financial market development; Bond markets; Banking sector; Stock markets;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

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