SSE/EFI Working Paper Series in Economics and Finance
Alessandra Bonfiglioli and Caterina Mendicino
Financial Liberalization, Banking Crises and Growth: Assessing the Links
This paper studies the effects of financial
liberalization and banking crises on growth. It shows that financial
liberalization spurs on average economic growth. Banking crises are harmful
for growth, but to a lesser extent in countries with open financial systems
and good institutions.
The positive effect of financial liberalization
is robust to different definitions. While the removal of capital account
restrictions is effective by increasing financial depth, equity market
liberalization affects growth directly.
The empirical analysis is
performed through GMM dynamic panel data estimations on a panel of 90
in the period 1975-1999.
Keywords: Capital account liberalization; equity market liberalization; financial development; institutions; dynamic panel data; (follow links to similar papers)
JEL-Codes: C23; F02; G15; O11; (follow links to similar papers)
28 pages, October 21, 2004
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