scholarly journals Capital Account Liberalization, Institutions and Financial Development: Cross Country Evidence

10.3386/w8967 ◽  
2002 ◽  
Author(s):  
Menzie Chinn ◽  
Hiro Ito
Keyword(s):  
Financial Development ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
Cross Country

scholarly journals Capital account liberalization and income inequality: a panel study of 28 European countries

2021 ◽  
Vol 24 (1) ◽  
Author(s):  
Muhammad Taufik Radhianshah ◽  
Akhmad Syakir Kurnia
Keyword(s):  
Income Inequality ◽  
Panel Study ◽  
Institutional Quality ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
Financial Transaction ◽  
International Scope ◽  
Financial Depth ◽  
Cross Country

Financial globalization has evolved from domestic policy to international scope policy. One of its form is Capital account liberalization which we can observe from the declining number of restrictions among countries for cross-border financial transaction, and the increasing level of capital flow between countries. Europe cross-country financial transaction has been increasing for the last three decades and this increase happened simultaneously with the increase of income inequality as measured with Gini index. This condition gives impression that there is a positive correlation between income inequality and capital account liberalization. This research aims to study whether income inequality corresponds to the increase of capital account liberalization in 28 Europe countries. Furthermore, this research seeks to understand the role of institutional quality and financial depth as threshold variables. By employing System GMM Estimator on balanced panel data, this study finds that capital account liberalization positively correlated with income inequality and institutional quality proven to be important threshold variable. These findings emphasize the urgency for policy maker to consider institutional quality before or during the implementation of capital account liberalization.

scholarly journals Trade Openness, Financial Development, and Economic Growth in Turkey: Linear and Nonlinear Causality Analysis

2013 ◽  
Author(s):  
Muhsin Kar ◽  
Şaban Nazlıoğlu ◽  
Hüseyin Ağır
Keyword(s):  
Economic Growth ◽  
Trade Liberalization ◽  
Financial Development ◽  
Trade Openness ◽  
Capital Account ◽  
Causality Analysis ◽  
Capital Account Liberalization ◽  
Monthly Data ◽  
External Finance ◽  
Linear And Nonlinear

This paper aims at empirically investigating the direction of causality among trade liberalization, financial development, and economic growth in Turkey. By employing monthly data for the period January, 1989- November, 2007, both linear and nonlinear causality approaches indicate that (i) there is bi-directional causality between economic growth and trade openness, (ii) economic growth causes financial development, and (iii) financial development leads to trade liberalization. Thereby, linear and nonlinear approaches confirm strong causal linkages among financial development, trade openness, and economic growth in Turkey. These results partially imply that economic growth depends upon trade liberalization through external finance in Turkey which has been experiencing capital account liberalization since 1989.

scholarly journals Does Capital Account Liberalization Spur Entrepreneurship: The Role of Financial Development

2021 ◽  
Vol 13 (16) ◽  
pp. 9238
Author(s):  
Chun Jiang ◽  
Amei Feng ◽  
Chunhuan Xiao
Keyword(s):  
Financial Development ◽  
Developing Economies ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
The Sustainable Development ◽  
Developed Economies ◽  
Domestic Credit

Entrepreneurship is regarded as the cornerstone of the sustainable development of a society. In this study, we empirically investigate the possible economic impacts of capital account liberalization on entrepreneurship. Using a panel dataset of 103 countries and regions and the system generalized method of moments (GMM), this paper demonstrates a positive relationship between capital account liberalization and entrepreneurship in developed economies whereas a negative relationship in developing economies. Furthermore, domestic financial development plays an important moderating role in the relationship between capital account openness and entrepreneurship. Specifically, the negative impact of capital account liberalization in developing economies is mitigated by a high degree of domestic credit and equity market development, the continuous deepening of finance and better financial inclusion. Our findings imply that domestic financial development is an essential prerequisite for the opening of a country’s capital account, especially for developing countries.

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