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Did Globalisation Influence Credit Market Deregulation?

Author

Listed:
  • Eppinger, Peter
  • Potrafke, Niklas

Abstract

We investigate whether globalisation influenced credit market deregulation over the period 1970-2010. Globalisation is measured by the KOF indices of globalisation. Credit market deregulation is measured by the credit market freedom indicators of the Fraser Institute. The results from both cross-sectional and panel regressions using ordinary least squares indicate a positive correlation between globalisation and credit market deregulation. We account for reverse causality using predicted trade openness as an instrumental variable and show that this approach gives rise to different conclusions. Two-stage least squares estimations do not show that globalisation had a causal influence on credit market deregulation.

Suggested Citation

  • Eppinger, Peter & Potrafke, Niklas, 2016. "Did Globalisation Influence Credit Market Deregulation?," Munich Reprints in Economics 43459, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:43459
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    Cited by:

    1. Farah Amir, 2020. "Role of Financial Development in Economic Globalization: Evidence from Six Developing Countries," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 10(1), pages 26-33.
    2. Niklas Potrafke, 2019. "The globalisation–welfare state nexus: Evidence from Asia," The World Economy, Wiley Blackwell, vol. 42(3), pages 959-974, March.
    3. Edward Anderson & Samuel Obeng, 2021. "Globalisation and government spending: Evidence for the ‘hyper‐globalisation’ of the 1990s and 2000s," The World Economy, Wiley Blackwell, vol. 44(5), pages 1144-1176, May.
    4. Batten, Jonathan A. & Bilgin, Mehmet Huseyin & Demir, Ender & Gozgor, Giray, 2023. "Does globalization affect credit market controls?," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 21-43.
    5. Giray Gozgor & Priya Ranjan, 2017. "Globalisation, inequality and redistribution: Theory and evidence," The World Economy, Wiley Blackwell, vol. 40(12), pages 2704-2751, December.
    6. Cândida Ferreira, 2020. "Globalisation and Economic Growth: A Panel Data Approach," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(2), pages 187-236.
    7. Brian Chi-ang Lin & Siqi Zheng & Maoliang Bu & Chin-Te Lin & Bing Zhang, 2016. "Globalization And Climate Change: New Empirical Panel Data Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 577-595, July.
    8. Balli, Faruk & Pericoli, Filippo M. & Pierucci, Eleonora, 2018. "Globalization and international risk-sharing: The role of social and political integration," European Journal of Political Economy, Elsevier, vol. 55(C), pages 324-345.
    9. Sabine Deij & Jakob B. Madsen & Laura Puzzello, 2021. "When are instruments generated from geographic characteristics in bilateral relationships invalid?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(4), pages 437-452, June.
    10. Theophilus Lartey & Albert Danso, 2020. "Globalization, free markets and investor protection," Economics and Business Letters, Oviedo University Press, vol. 9(1), pages 8-13.
    11. Callaghan, Christian William, 2021. "Consequences of deindustrialisation for globalisation: Insights for international business," International Business Review, Elsevier, vol. 30(3).

    More about this item

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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