The scope and limits of financial liberalisation in developing countries: A critical survey

Gibson, Heather D.; Tsakalotos, Euclid

doi:10.1080/00220389408422329

Cited by 120 publications

(55 citation statements)

References 45 publications

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“…Another research by Lanyi and Saracoglu (1983) found a positive and significant relationship between interest rates and economic growth while the World Bank sponsored research project also found a positive relationship between real interest rates and economic growth in most of the developing countries in the world (World Bank, 1989). Roubin and Sala (1992) conclude that financial tyranny has a tendency to to lower economic growth while Gibson and Tsakalotos (1994) cast suspicions on these results. The authors claim that the results of Roubin and Sala (1992) could suffer from missing variable bias because each measure of financial distress is added individually and specifically in the study.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic Growth, Financial Depth and Lending Rate Nexus: A Case of Oil Dependant Economy

Nasir¹,

Ali²,

Khokhar³

2014

International Journal of Financial Research

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This research empirically investigates the long and short run causal relationships between economic growth, financial depth and lending rate in the unique economic setup of Saudi Arabia where 92% of total GDP comes from oil exports. Study uses two proxies for financial depth namely liquid liability indicator and banks claim to the private sector to GDP ratio, while economic growth is measured by real GDP per capita. This study intends to get answers for such questions as, if financial depth effects or causes economic growth in an oil based economy, and does lending rate have any relationship with financial depth or economic growth. Using the Johansens co-integration, Granger causality and Vector Error Correction Model (VECM) the study finds a single co-integrated equation which establishes a long run relationship among the variables. Finding suggests that financial depth causes lending rate which is in contradiction with most of the available literature; the study tries to explain this type of causality under the present circumstances. Furthermore no short term significant relationship exists among the variables as reflected by the results of the Wald Test, that is due to the unique political and economic setup under consideration.

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Section: Literature Reviewmentioning

confidence: 99%

Economic Growth, Financial Depth and Lending Rate Nexus: A Case of Oil Dependant Economy

Nasir¹,

Ali²,

Khokhar³

2014

International Journal of Financial Research

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“…Consequently, we cannot, a priori, predict the signs of the coefficients of AID, ODA and FDI. The inclusion of fsd  in the model is justified by the works of Cameron (1967), Goldsmith (1969), McKinnon (1973), Shaw, (1973, Gibson and Tsakalotos (1994), Adenutsi (2002), andNdebbio (2004), which demonstrated that the financial sector could be a catalyst of economic growth, at least indirectly, if it is developed to be wellperforming and integrated to mobilise critical financial resources. The study used quarterly time …”

Section: Rem Was Included To Capture the Impact Of Remittances On Endmentioning

confidence: 99%

Financial development, international migrant remittances and endogenous growth in Ghana

Adenutsi

2011

Studies in Economics and Finance

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Purpose: This paper seeks to provide further insights into understanding the finance-growth nexus by verifying the hypothesis that financial development promotes economic growth through its capacity to attract increased international migrant remittances to Ghana. Design/Methodology/Approach: A dynamic equilibrium-correction mechanism model for the period 1987(3)- 2007(4) was estimated following the Johansen cointegration procedure. This approach produced maximum likelihood estimators of the unconstrained cointegrating vector, and suggested the number of cointegrating vectors without relying on an arbitrary normalization. Findings: The findings reveal two stylized facts with reference to Ghana. First, although financial development Granger-causes international migrant remittance inflows, it is in itself directly detrimental to endogenous growth. Second, international migrant remittance inflows are statistically significant in explaining variations in endogenous growth in the short run as well as in the long run. Practical Implications: Since directly, financial development hampers endogenous growth, but Granger-causes increased inflows of migrant remittances, and these remittances impact positively but marginally on endogenous growth, it follows that the sequencing of implementing Ghana's financial reform programmes should be reexamined, whilst an enabling environment is created to induce Ghanaians living abroad to remit home through official channels. Originality/Value: International migrant remittances were found to be statistically significant in promoting endogenous growth, albeit marginally. Financial development does not directly engender growth, unless it succeeds in attracting non-debt foreign capital in the form of remittances through the formal sector. Financial development causes migrant remittance inflows which impact positively on growth. Keywords: Financial Development, Economic Growth, International Migrant Remittances, Ghana INTRODUCTIONA well-functioning financial sector is expected to attract idle funds for financing economic growth and development projects. Generally, international migrant remittances are highly significant to low-income economies constituting about 2% of their gross domestic product (GDP) and 6.2% of their imports (World Bank, 2003). Besides, these remittances have, in recent years, surpassed foreign direct investment or official development assistance, export revenues, and foreign aid (Giuliano and Ruiz-Arranz, 2005; World Bank, 2006). Consequently, in recent years, international migrant remittance flows to developing countries have attracted the attention of policymakers, researchers and scholars. The rising interest and enquiry into the continuous increasing remittance flows to developing countries, notwithstanding, experts have expressed divergent views on its implications for economic growth and development. On one hand, remittances are believed to be a catalyst for accelerated economic growth and development as they increase purchasing power of households and se...

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“…The benefit derivable from a healthy and developed financial system relates to savings mobilization and efficient financial intermediation roles (Gibson and Tsakalotos, 1994 Shaw (1973) were the first to suggest that liberalizing a repressed financial system led to higher interest rates which equates the demand and supply of savings. The authors claim that higher interest rates leads to increased savings and financial intermediation in improving the efficiency of…”

Section: IIImentioning

confidence: 99%

Financial Deregulation Bounding to Credit Mobilization in Nigeria: A Case for the Real Sectors and SMEs

Ikenna¹

2012

IOSR-JHSS

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The scope and limits of financial liberalisation in developing countries: A critical survey

Cited by 120 publications

References 45 publications

Economic Growth, Financial Depth and Lending Rate Nexus: A Case of Oil Dependant Economy

Economic Growth, Financial Depth and Lending Rate Nexus: A Case of Oil Dependant Economy

Financial development, international migrant remittances and endogenous growth in Ghana

Financial Deregulation Bounding to Credit Mobilization in Nigeria: A Case for the Real Sectors and SMEs

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