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

Yıl 2017, ICMEB17 Özel Sayısı, 697 - 706, 01.12.2017

Ayşegül Güllü Zühal Kurul

Öz

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

Anahtar Kelimeler

Financial Development International Financial Integration And Institutions Panel Cointegration

Kaynakça

  • Agénor, P. R. (2003). Benefits and costs of international financial integration: theory and facts. The World Economy, 26(8), 1089-1118.
  • Bai, J., & Perron, P. (2003). Computation and analysis of multiple structural change models. Journal of applied econometrics, 18(1), 1-22.
  • Baltagi, B. H., Demetriades, P. O., & Law, S. H. (2009). Financial development and openness: Evidence from panel data. Journal of development economics, 89(2), 285-296.
  • Barth, J. R., Caprio, G., & Levine, R. (2004). Bank regulation and supervision: what works best?. Journal of Financial intermediation, 13(2), 205-248.
  • Beck, T., & Levine, R. (2005). Legal institutions and financial development. Handbook of new institutional economics, 251-278.
  • Bekaert, G., Harvey, C. R., & Lundblad, C. (2005). Does financial liberalization spur growth?. Journal of Financial economics, 77(1), 3-55.
  • Boyd, J. H., & Smith, B. D. (1992). Intermediation and the equilibrium allocation of investment capital: Implications for economic development. Journal of Monetary Economics, 30(3), 409-432.
  • Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47(1), 239-253.
  • Chinn, M. D., & Ito, H. (2006). What matters for financial development? Capital controls, institutions, and interactions. Journal of development economics, 81(1), 163-192.
  • Claessens, S., Djankov, S., Fan, J. P., & Lang, L. H. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The journal of finance, 57(6), 2741-2771.
  • De Gregorio, J. (1999). Financial Integration, Finacial Development and Economic Growth. Estudios de Economia, 26(2), 137-161.
  • Devereux, M. B., & Yu, C. (2014). International financial integration and crisis contagion (No. w20526). National Bureau of Economic Research.
  • Dumitrescu, E. I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460.
  • Eberhardt, M., & Teal, F. (2010, September). Productivity Analysis in Global Manufacturing Production. In DEGIT Conference Papers (No. c015_019). DEGIT, Dynamics, Economic Growth, and International Trade.
  • Edison, H. J., Levine, R., Ricci, L., & Slİk, T. (2002). International financial integration and economic growth. Journal of international money and finance, 21(6), 749-776.
  • Henry, P. B. (2000). Do stock market liberalizations cause investment booms?. Journal of Financial economics, 58(1), 301-334.
  • Klein, M. W., & Olivei, G. P. (2008). Capital account liberalization, financial depth, and economic growth. Journal of international money and finance, 27(6), 861-875.
  • Lane, P. R., & Milesi-Ferretti, G. M. (2007). The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970–2004. Journal of international Economics, 73(2), 223- 250.
  • Law, S. H., Tan, H. B., & Azman-Saini, W. N. W. (2014). Financial development and income inequality at different levels of institutional quality. Emerging Markets Finance and Trade, 50(sup1), 21-33.
  • Le, T. H., Kim, J., & Lee, M. (2016). Institutional quality, trade openness, and financial sector development in Asia: An empirical investigation. Emerging Markets Finance and Trade, 52(5), 1047-1059.
  • Levine, R. (1997). Financial development and economic growth: views and agenda. Journal of economic literature, 35(2), 688-726.
  • Mishkin, F. S. (2009). Globalization, macroeconomic performance, and monetary policy. Journal of Money, Credit and Banking, 41(s1), 187-196.
  • Pesaran, M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. Cambridge Working Papers in Economics No. 0435, Faculty of Economics, University of Cambridge.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312.
  • Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of econometrics, 68(1), 79-113.
  • Quartey, P., & Prah, F. (2008). Financial development and economic growth in Ghana: is there a causal link?. African Finance Journal, 10(1), 28-54.32.
  • Rajan, R. G., & Zingales, L. (1998). Power in a Theory of the Firm. The Quarterly Journal of Economics, 113(2), 387-432.
  • Rajan, R. G., & Zingales, L. (2003). The great reversals: the politics of financial development in the twentieth century. Journal of financial economics, 69(1), 5-50.
  • Westerlund, J. (2006). Testing for panel cointegration with multiple structural breaks. Oxford Bulletin of Economics and Statistics, 68(1), 101-1

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

Yıl 2017, ICMEB17 Özel Sayısı, 697 - 706, 01.12.2017

Ayşegül Güllü Zühal Kurul

Öz

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.

Anahtar Kelimeler

Finansal Gelişmişlik Uluslararası Finansal Bütünleşme Kurumsal Kalite Panel

Kaynakça

  • Agénor, P. R. (2003). Benefits and costs of international financial integration: theory and facts. The World Economy, 26(8), 1089-1118.
  • Bai, J., & Perron, P. (2003). Computation and analysis of multiple structural change models. Journal of applied econometrics, 18(1), 1-22.
  • Baltagi, B. H., Demetriades, P. O., & Law, S. H. (2009). Financial development and openness: Evidence from panel data. Journal of development economics, 89(2), 285-296.
  • Barth, J. R., Caprio, G., & Levine, R. (2004). Bank regulation and supervision: what works best?. Journal of Financial intermediation, 13(2), 205-248.
  • Beck, T., & Levine, R. (2005). Legal institutions and financial development. Handbook of new institutional economics, 251-278.
  • Bekaert, G., Harvey, C. R., & Lundblad, C. (2005). Does financial liberalization spur growth?. Journal of Financial economics, 77(1), 3-55.
  • Boyd, J. H., & Smith, B. D. (1992). Intermediation and the equilibrium allocation of investment capital: Implications for economic development. Journal of Monetary Economics, 30(3), 409-432.
  • Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47(1), 239-253.
  • Chinn, M. D., & Ito, H. (2006). What matters for financial development? Capital controls, institutions, and interactions. Journal of development economics, 81(1), 163-192.
  • Claessens, S., Djankov, S., Fan, J. P., & Lang, L. H. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The journal of finance, 57(6), 2741-2771.
  • De Gregorio, J. (1999). Financial Integration, Finacial Development and Economic Growth. Estudios de Economia, 26(2), 137-161.
  • Devereux, M. B., & Yu, C. (2014). International financial integration and crisis contagion (No. w20526). National Bureau of Economic Research.
  • Dumitrescu, E. I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460.
  • Eberhardt, M., & Teal, F. (2010, September). Productivity Analysis in Global Manufacturing Production. In DEGIT Conference Papers (No. c015_019). DEGIT, Dynamics, Economic Growth, and International Trade.
  • Edison, H. J., Levine, R., Ricci, L., & Slİk, T. (2002). International financial integration and economic growth. Journal of international money and finance, 21(6), 749-776.
  • Henry, P. B. (2000). Do stock market liberalizations cause investment booms?. Journal of Financial economics, 58(1), 301-334.
  • Klein, M. W., & Olivei, G. P. (2008). Capital account liberalization, financial depth, and economic growth. Journal of international money and finance, 27(6), 861-875.
  • Lane, P. R., & Milesi-Ferretti, G. M. (2007). The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970–2004. Journal of international Economics, 73(2), 223- 250.
  • Law, S. H., Tan, H. B., & Azman-Saini, W. N. W. (2014). Financial development and income inequality at different levels of institutional quality. Emerging Markets Finance and Trade, 50(sup1), 21-33.
  • Le, T. H., Kim, J., & Lee, M. (2016). Institutional quality, trade openness, and financial sector development in Asia: An empirical investigation. Emerging Markets Finance and Trade, 52(5), 1047-1059.
  • Levine, R. (1997). Financial development and economic growth: views and agenda. Journal of economic literature, 35(2), 688-726.
  • Mishkin, F. S. (2009). Globalization, macroeconomic performance, and monetary policy. Journal of Money, Credit and Banking, 41(s1), 187-196.
  • Pesaran, M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. Cambridge Working Papers in Economics No. 0435, Faculty of Economics, University of Cambridge.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312.
  • Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of econometrics, 68(1), 79-113.
  • Quartey, P., & Prah, F. (2008). Financial development and economic growth in Ghana: is there a causal link?. African Finance Journal, 10(1), 28-54.32.
  • Rajan, R. G., & Zingales, L. (1998). Power in a Theory of the Firm. The Quarterly Journal of Economics, 113(2), 387-432.
  • Rajan, R. G., & Zingales, L. (2003). The great reversals: the politics of financial development in the twentieth century. Journal of financial economics, 69(1), 5-50.
  • Westerlund, J. (2006). Testing for panel cointegration with multiple structural breaks. Oxford Bulletin of Economics and Statistics, 68(1), 101-1
Toplam 29 adet kaynakça vardır.

Ayrıntılar

Birincil Dil İngilizce
Konular Finans
Bölüm Research Article
Yazarlar

Ayşegül Güllü Bu kişi benim

Zühal Kurul Bu kişi benim

Yayımlanma Tarihi 1 Aralık 2017
Gönderilme Tarihi 17 Ekim 2017
Yayımlandığı Sayı Yıl 2017 ICMEB17 Özel Sayısı

Kaynak Göster

APA Güllü, A., & Kurul, Z. (2017). FINANCIAL DEVELOPMENT, INTERNATIONAL FINANCIAL INTEGRATION AND INSTITUTIONAL QUALITY: COINTEGRATION ANALYSIS FOR EMEGING MARKET ECONOMIES. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 13(13), 697-706.