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The Impact of Financial Openness on Economic Integration: Evidence from the Europe and the Cis

  • Fabrizio Carmignani


    (Economic Analysis Division, United Nations Economic Commission for Europe (UNECE))

  • Abdur Chowdhury


    (Economic Analysis Division, United Nations Economic Commission for Europe (UNECE))

We study whether financial openness facilitates the economic integration of formerly centrally planned economies with the EU-15. Two dimensions of economic integration are considered: cross-country convergence of per-capita incomes and bilateral trade in goods and services. We find that more financially open economies effectively catch-up faster and trade more with the EU-15. These integrationenhancing effects occur over and above any effect stemming from domestic financial deepening and other factors determining growth and trade.

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Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 88.

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Length: 22 pages
Date of creation: Apr 2005
Date of revision: Apr 2005
Handle: RePEc:mib:wpaper:88
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