FINANCIAL DEVELOPMENT, INTERNATIONAL FINANCIAL INTEGRATION AND INSTITUTIONAL QUALITY: COINTEGRATION ANALYSIS FOR EMEGING MARKET ECONOMIES

Abstract

This paper investigates the dynamic relationship between financial development, international financial integration and institutional quality in emerging countries. We employ panel cointegration tests for a panel of 18 emerging economies over the period of 1985-2014 by controlling for cross sectional dependency and structural breaks. The results of this study show that there is a long run cointegration relationship between financial development, international financial integration and institutional quality. We also use the panel causality approach for determining the causal links between variables that are interested. Our results confirm the bidirectional causal relationship between financial development and international financial integration

Keywords

• Financial Development
• International Financial Integration And Institutions
• Panel Cointegration

FİNANSAL GELİŞMİŞLİK, ULUSLARARASI FİNANSAL BÜTÜNLEŞME VE KURUMSAL KALİTE: YÜKSELEN PİYASA EKONOMİLERİ İÇİN BİR EŞBÜTÜNLEŞME ANALİZİ

Abstract

This paper investigates the dynamic relationship between financial development, international financial integration and institutional quality in emerging countries. We employ panel cointegration tests for a panel of 18 emerging economies over the period of 1985-2014 by controlling for cross sectional dependency and structural breaks. The results of this study show that there is a long run cointegration relationship between financial development, international financial integration and institutional quality. We also use the panel causality approach for determining the causal links between variables that are interested. Our results confirm the bidirectional causal relationship between financial development and international financial integration.

Keywords

• Finansal Gelişmişlik
• Uluslararası Finansal Bütünleşme
• Kurumsal Kalite
• Panel

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