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Globalization and financial development in East Asian economies : panel data evidence


Law, Siong Hook and Wan Ngah, Wan Azman Saini Globalization and financial development in East Asian economies : panel data evidence. In: International Conference on Economic and Financial Challenge in Asia-Pacific Countries, 29 June-1 July 2012, Chengdu, China. .


This study examines the role of globalization on financial development in eight East Asian economies, paying particular attention to the importance of institutions in mediating this link. Given the relatively short span of the time series data, a panel cointegration and panel Granger causality tests are employed to infer the long-run and short-run causal relationships. The heterogeneous panel cointegration test reveals that cointegration is present among globalization, institutions, financial reforms, financial development and real GDP per capita. The Granger causality results indicate that globalization has significant causal influence on institutional quality, and institutional reforms in turn facilitate and support financial development, in particular the development of banking sector in East Asia. Globalization is also found to have a favorable causal impact on stock market development without passing through institutional quality channel.

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Additional Metadata

Item Type: Conference or Workshop Item (Paper)
Subject: Globalization
Subject: Banks and banking - East Asia
Subject: Economic development - East Asia
Divisions: Faculty of Economics and Management
Keywords: Globalization; Institutions; Banking sector development; Stock market development
Depositing User: Samsida Samsudin
Date Deposited: 24 Oct 2013 08:13
Last Modified: 22 May 2015 06:46
URI: http://psasir.upm.edu.my/id/eprint/25924
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