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The determinants of financial development: institutions, openness and financial liberalisation.


Siong, Hook Law and Habibullah, Muzafar Shah (2009) The determinants of financial development: institutions, openness and financial liberalisation. South African Journal of Economics, 77 (1). pp. 45-58. ISSN 1813-6982


This paper provides new evidence that sheds light on the influence of institutional quality, trade openness and financial liberalisation on financial market development, using data from 27 economies (the G-7, Europe, East Asia and Latin America) during 1980-2001. The dynamic panel data analysis results demonstrate that real income per capita and institutional quality are statistically significant determinants of banking sector development and capital market development. The trade openness, however, is more prominent in promoting capital market development. In terms of financial liberalisation, the empirical results suggest that domestic financial sector reforms tend to promote banking sector development, whereas stock market liberalisation is potent in delivering stock market development. Nevertheless, the financial liberalisation programmes are more responsive in developed economies.

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Additional Metadata

Item Type: Article
Subject: Finance - Malaysia.
Subject: Economic development - Malaysia.
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.1111/j.1813-6982.2009.01201.x
Publisher: Wiley-Blackwell
Keywords: Financial development; Institutions; Openness; Financial liberalisation; Panel data analysis.
Depositing User: Emelda Mohd Hamid
Date Deposited: 04 Jun 2013 01:54
Last Modified: 04 Jun 2013 01:54
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1111/j.1813-6982.2009.01201.x
URI: http://psasir.upm.edu.my/id/eprint/17048
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