The impact of financial liberalization policies on financial development: evidence from developing economics

Abstract

We collect data on a number of financial restraints, including restrictions on deposit and lending interest rates and reserve and liquidity requirements, from central banks of six developing countries. We estimate the effects of these policies on financial development, controlling for the effect of economic development and using standard econometric techniques. We find that the effects of financial policies vary considerably across our sample of countries. Our findings demonstrate that financial liberalisation is a much more complex process than has been assumed by earlier literature and its effects on financial development are ambiguous.

Financial Deepening and Bank Performance: A Case Study of Selected Commercial Banks in Nigeria

“…The problem now is how to determine the appropriate level of financial deepening suitable for bank performance, economic growth and development. Also, to a great extent, empirical works, such as: [16] [17] [18] [19] on the relationship between financial deepening and economic growth were available without having due consideration to the 'lubricant' that fuelled economic growth which is banks' performance.…”

How Has Politico-Economic Liberalization Affected Financial Allocation Efficiency? Fresh African Evidence

“…While a substantial bulk of the literature has examined the impact of financial reforms on financial development (Cho et al, 1986;Arestis et al, 2002;, but for Asongu (2012b), the financial efficiency dimension has not been tackled from a fundamental allocation efficiency standpoint (Ataullah et al, 2004;Saxegaard, 2006;Al-Obaidan, 2008;Kiyato, 2009;Kablan, 2010). Perhaps the main hurdle in investigating the linkage between liberalization of financial markets and capital allocation efficiency lies in the fact that, the efficiency of capital allocation is not directly observable (Kukenova, 2011, p.1).…”

Liberalization and Financial Sector Competition: A Critical Contribution to the Empirics with an African Assessment

“…While a substantial bulk of the literature has examined the impact of financial reforms on financial development (Arestis et al, 2002;Asongu, 2012c), surprisingly, as far as we have reviewed there is currently no study that has investigated the incidence of these reforms (that targeted economic and financial efficiency) on financial sector competition. Hence, drawing from the experience of a continent that has been implementing development financial reforms, this study aims to investigate the incidence of liberalization policies on financial sector competition.…”