Institutional Quality, Trade Openness, and Financial Development in Asia: An Empirical Investigation

Le, Ha Thai; Kim, Jungsuk; Lee, Minsoo

doi:10.2139/ssrn.2707547

Cited by 10 publications

(6 citation statements)

References 44 publications

(21 reference statements)

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“…There is an enormous amount of empirical literature that has explored this linkage in practice. For instance, according to [30] countries with more trade openness have a relatively higher economic growth compared to those which are less open. Similar opinions were shared by [31] [32].…”

Section: Relationship Between Trade Openness Economic Growth and Fdimentioning

confidence: 99%

Foreign Direct Investment, Trade Openness and Economic Growth: Evidence from Ghana

Nketiah¹,

Cai²,

Adjei³

et al. 2020

OJBM

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This article investigates the relationship among foreign direct investment, trade openness and economic growth in Ghana taking the period of post-liberalization covering 1975-2017. The Augmented Dickey-Fuller (ADF) test for unit root, regression analysis, descriptive analysis, and Pearson correlation was used to investigate the relationships. ADF test for unit root result shows all variables to be integrated of order one, that is they are stationary after the first difference. The study extracted and used secondary data sources derived from the World Development Indicators (WDI) of the World Bank and Bank of Ghana website over the period 1975-2017. The study proxied foreign direct investment, inflation, and trade openness were used as an independent indicator while GDP growth (annual %) was the dependent indicator. Using the Ordinary Least Squares (OLS) estimator, the study revealed that trade openness is the main factor affecting GDP growth (annual %) in Ghana. Also, the study finds that foreign direct investment and Inflation had (−, or +) impact but were not statistically significant on GDP growth (annual %). Therefore, the study concludes by recommending robust measures to enhance trade openness in terms of encouraging exports and inflow of FDI through the creation of an enabling and friendly environment to do business for output growth dynamics in Ghana.

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Section: Relationship Between Trade Openness Economic Growth and Fdimentioning

confidence: 99%

Foreign Direct Investment, Trade Openness and Economic Growth: Evidence from Ghana

Nketiah¹,

Cai²,

Adjei³

et al. 2020

OJBM

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show abstract

“…Following the standard literature on economic growth, the present study used GDP per capita (dependent variable), expressed in natural logarithm form, as a measure for economic growth (e.g. Han et al, 2014;Le et al, 2016;Levine, 1997;Levine and Zervos, 1998). Other macroeconomic control variables are used including gross savings (GS) measured as a percentage of GDP, macroeconomic stability measured by inflation (MS1) and real interest rate (MS2).…”

Section: Macroeconomic Variablesmentioning

confidence: 99%

Revisiting the Relationship Between Governance Quality and Economic Growth

Al-Shiab

Al‐Malkawi

Lahrech

2020

IJEFI

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This study provides evidence on the relationship between governance quality and economic growth. We use the six Worldwide Governance Indicators (WGI) published by the World Bank and a sample of 29 countries (23 developed countries and 6 emerging economies) covering the period. To account for the potential endogeneity problem, we employ panel GMM estimators. The analysis proceeds in three stages. Firstly, we examine the effect of these six governance indicators on economic growth for the whole sample. Next, we apply a principal component analysis (PCA) to these indicators to construct a global governance index (GGI) and test its impact on economic growth. Finally, to examine the effect of the GGI on economic growth in emerging economies relative to developed countries, we introduce an interaction dummy variable. The results show a positive relationship between governance quality and economic growth in both developed and emerging economies. Moreover, the contribution of the GGI to the economic growth of emerging economies is more than that of developed ones.

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“…The study also highlights the importance of financial openness and quality of institutions to promote financial depth and lending activities. For Asia and Pacific region, Le et al (2015) tried to highlight the significant determinants of financial depth for Asian and Pacific region economies and came out with trade openness, institutional factors and real GDP as significant determinants that affect financial sector development. Samadipour et al (2017) explored the relationship between financial liberalization, institutional governance and financial development.…”

Section: Introductionmentioning

confidence: 99%

Institutional governance and financial sector development: Panel evidence from Asian economies

Ellahi

Kiani

Malik

et al. 2021

Cogent Economics & Finance

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Current study aims to investigate the impact of institutional governance (GOV), trade openness (TOPEN), real output (RGDP), economic freedom (EFR), inflation rate (INFR) and real output growth on financial sector development (FSD) of selected Asian economies. A consolidated financial sector development index, representing banking sector and stock market is generated using Principal Component Analysis (PCA). The study conducted data analysis by applying panel estimation method of Generalized Method of Moments (GMM), and showed that trade openness, and real output moderate the financial development (FSD) through its positive interaction with institutional governance (GOV). The findings highlight that governance is an important and crucial driver of financial sector development and stock market development in four selected Asian economies.

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Institutional Quality, Trade Openness, and Financial Development in Asia: An Empirical Investigation

Cited by 10 publications

References 44 publications

Foreign Direct Investment, Trade Openness and Economic Growth: Evidence from Ghana

Foreign Direct Investment, Trade Openness and Economic Growth: Evidence from Ghana

Revisiting the Relationship Between Governance Quality and Economic Growth

Institutional governance and financial sector development: Panel evidence from Asian economies

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