Does financial liberalization decrease capital flight? A panel causality analysis

Yalta, A. Yasemin; Yalta, A. Talha

doi:10.1016/j.iref.2011.09.003

Cited by 42 publications

(27 citation statements)

References 29 publications

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“…To control for time-specific shocks (i.e., δ t and π t in equations), a set of year dummy variables were added to the level equations. Following other similar studies (Ciarreta and Zarraga 2010;Hartwig 2010;Yalta and Yalta 2012), we conducted Wald tests on the coefficients of the lagged explanatory variables (γ j in Equation 1 and θ j in Equation 2). If in such models the Wald tests are statistically different from 0 in a joint way, then a Granger causality is confirmed.…”

Section: Methodsmentioning

confidence: 99%

State spending for higher education: Does it improve economic performance?

Bowen

Qian

2017

Regional Science Policy & Practice

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Abstract. Increases in regional spending for higher education are conventionally believed to cause increases in economic performance. However, while some empirical evidence directly or indirectly confirms this belief, some research also brings it into question and even contradicts it. This research uses panel Granger causal models to consider not only the conventional belief but also the opposite possibility -that increases in economic performance cause increases in US state spending for higher education. It examines state spending for higher education in relation to educational attainment, per capita income and gross domestic product within the fifty states of the United States for the period 1989-2014. The results show that while increases in the share of a state's population with a bachelor degree Granger causes improved economic performance, in the short term of four years or less the direction of causality goes in the opposite direction from the one conventionally believed. Implications of this reverse causality are discussed from the policy perspective. JEL classification: O

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Section: Methodsmentioning

confidence: 99%

State spending for higher education: Does it improve economic performance?

Bowen

Qian

2017

Regional Science Policy & Practice

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“…For instance, little evidence for the positive role of interest rate liberalization on savings was found and that financial liberilization led to capital flight [16]. Other researchers hold the view that firms try to oppose financial reforms that breed competition [17].…”

Section: Empirical Review Of Literaturementioning

confidence: 99%

Determinants of Bank Deposits in Ghana: Does Interest Rate Liberalization Matters?

Boadi¹,

Li²,

Lartey³

2015

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This research paper examines the effect of interest rate liberalization on bank deposits in a developing country Ghana. A deposit function model was specified with long term deposit as the main dependent variable with real savings rate, real treasury bill rate, exchange rate movement and gross domestic product as independent variables while controlling for inflation. Ordinary Least Squares (OLS) method was used to estimate the specified model which covered seasonally adjusted quarterly data drawn from Bank of Ghana and Ghana Statistical Service. The data were input into a spreadsheet and exported into Econometric View 7 which was used for processing the data. The results of the study revealed that the interest rate liberalization and gross domestic product jointly accounted for about 78% of the variation in the level of bank savings deposits in Ghana. The study has also shown that the liberalization of the interest rates has made it attractive for people with idle funds to save with financial institutions especially the banks. It also revealed a negative relationship between real savings rate and the real treasury bill rate expected in a high inflationary environment. All the independent variables were significant. It is therefore recommended that the Bank of Ghana remains resilience on interest rate liberalization so that surplus funds can be made available for investors and also to reduce the level of inflation in Ghana.

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“…It is argued that this effect, by moving scarce capital away from less developed economies, might contribute to adverse effects on investment, and finally on economic growth (Yalta & Yalta, 2012). 4 For a comprehensive survey on the effects of financial liberalization on growth and volatility, see Kose, Prasad, Rogoff, et al (2009).…”

Section: Introductionmentioning

confidence: 99%