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Financial Development, Openness and Institutions: Evidence from Panel Data

  • Badi H. Baltagi
  • Panicos O. Demetriades


  • Siong Hook Law

Utilising four annual panel datasets and dynamic panel data estimation procedures we find that trade and financial openness, as well as economic institutions are statistically important determinants of the variation in financial development across countries and over time since the 1980s. However, we find mixed support for the hypothesis that the simultaneous opening of both trade and capital accounts is necessary to promote financial development in a contemporary setting.

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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 07/05.

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Date of creation: May 2007
Date of revision:
Handle: RePEc:lec:leecon:07/5
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