Impact of Financial and Trade Openness on Financial Development in Emerging Market Economies: The Case of Turkey

Çakan, Esin

doi:10.3844/ajebasp.2017.71.80

Cited by 2 publications

(4 citation statements)

References 33 publications

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Section: Resultssupporting

confidence: 94%

“…CAPR showed a positive and significant relationship with banks' cost of financial intermediation, signifying that greater CAPR contributes to a higher cost of intermediation. These findings fully conform with previous studies (Bazih and Vanwalleghem, 2021;Cakan, 2017;Douarin and Mickiewicz, 2017;Fu et al, 2020). We observed that ENTRYR has a positive and Note(s): NIM is the dependent variable in all models, where its higher values represent a higher cost of financial intermediation and vice versa.…”

Section: The Determinants Of the Banks' Cost Of Financial Intermediationsupporting

confidence: 92%

“…Openness to trade can reduce these rents by promoting reforms in the financial sector and providing access to international financial markets (Cakan, 2017). Financial transparency pushes policymakers to implement domestic financial sector reforms, such as improvements in regulatory efficiency, interest rate liberalization, banking privatization or securities market growth policies (Arif et al, 2020;Asamoah et al, 2019).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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The impact of trade openness on the cost of financial intermediation and bank performance: evidence from BRICS countries

Rahman

et al. 2021

IJOEM

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PurposeThe purpose of this paper is to examine the impact of trade openness on the cost of financial intermediation and bank performance. Developed and developing countries are currently pursuing trade openness to achieve higher bank performance with less intermediation costs.Design/methodology/approachIn attaining the study's objectives, several regression methodologies were employed (i.e. system generalized method of moments (GMM), fixed effect, pooled ordinary least squares (OLS) and vector error correction model (VECM)). The authors tested the hypothesis on data of 885 banks from BRICS countries, which span 18 years (2000–2017).FindingsThe results from this robust study showed that embedding higher trade openness reduces financial intermediation costs and improves banks' performance. The results remain robust following the use of different estimation methods and alternative variables as proxies. In addition, results were still valid upon considering bank level, industry level and country level as control variables. It was also observed that the relation pattern holds its rigidity during “good” and “bad” times (i.e. the global financial crisis).Originality/valueThe results provide better references for bank regulators, academics and policymakers to take advantage of the low financial intermediation costs resulting from trade openness.

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Section: Resultssupporting

confidence: 94%

Section: The Determinants Of the Banks' Cost Of Financial Intermediationsupporting

confidence: 92%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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The impact of trade openness on the cost of financial intermediation and bank performance: evidence from BRICS countries

Rahman

et al. 2021

IJOEM

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“…Financial openness, along with institutional and educational variables, explains most of the variation in financial development across countries and over time. Cakan (2017) Economic growth has a significant positive impact on financial development in ASEAN. This gives the meaning that the higher the economic growth of ASEAN countries will improve the quality of financial development in ASEAN.…”

Section: Resultsmentioning

confidence: 99%

Convergence of Financial Development in Asean Based on Private Credit and Liquid Liabilities Indicators

Prasetyo

2021

BISMA

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The financial development gap for ASEAN countries is critical to analyze since the widening financial development gap will lead to underdeveloped financial sector performance. The concept considered appropriate to measure the gap of financial development is the sigma, and beta convergence approaches. Therefore, this study aims to measure, test, and analyze the convergence of sigma and beta financial development in ASEAN. The method used was the Generalized Moment Method (GMM) dynamic panel with 2010-2017. Results of the study showed that there is a convergence of sigma and beta financial development in ASEAN countries. The limitation of this study is that it only uses two indicators of financial development. The governments of each ASEAN country can improve the financial sector by reforming the financial sector to mitigate, improve, and encourage the development of the financial sector. Keywords: ASEAN, convergence, financial development, GMM

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Impact of Financial and Trade Openness on Financial Development in Emerging Market Economies: The Case of Turkey

Cited by 2 publications

References 33 publications

The impact of trade openness on the cost of financial intermediation and bank performance: evidence from BRICS countries

The impact of trade openness on the cost of financial intermediation and bank performance: evidence from BRICS countries

Convergence of Financial Development in Asean Based on Private Credit and Liquid Liabilities Indicators

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