Financial sector development

About: Financial sector development is a research topic. Over the lifetime, 1674 publications have been published within this topic receiving 90787 citations.

Savings mobilisation and financial sector development: the nexus*

Abstract: The paper seeks to shed more light on the important, though neglected so far, nexus between saving mobilisation and financial sector development and the significant implications for poverty-reducing growth in developing countries. This is done by critically evaluating the existing vast independent literature on financial sector development and savings mobilisation with a primary focus on the channels and the mechanisms through which financial sector development affects savings and thus, the entire growth process. Aspects of the literature which have not been properly discussed before are also looked at. Furthermore, the paper discusses a new booming literature on savings mobilisation, namely social security reforms and the way they affect savings. Finally, we discuss the plethora of formal as well as informal institutions through which savings mobilisation is influenced in developing countries. The paper is of particular interest to those studying and/or trying to implement financial sector reforms for saving mobilisation and sustainable growth in developing countries.

Finance - Growth Nexus : Evidence from Sri Lanka

Abstract: This study investigates the relationship between financial development and economic growth of Sri Lanka using time series data from 1960 to 2008. Cointegration and causality tests are conducted to assess the finance-growth link by taking saving, investment, trade and real interest rate into account. The empirical results show that economic growth causes financial development in the long-run and there is no reverse causation. This conclusion of the study goes in line with the views expressed by Demetriades and Hussein (1996), Macri and Sinha (2001) and Abma and Fase (2003) but departs distinctively from the observations made by Ahmed and Ansari (1998), on the finance-growth link in relation to Sri Lanka. The results of this research also show that the investment causes the economic growth which in turn results in demand for financial services to follow the growth in the real sector of the economy. This study has further identified that Sri Lanka’s financial system has shown some weaknesses in performing its tasks which would have been instrumental in the determination of causality pattern between financial sector development and economic growth of the country. DOI: http://dx.doi.org/10.4038/ss.v40i1.4679 Staff Studies – Volume 40 Numbers 1 & 2, 1-36

The long-run relationship between economic growth, financial development, trade openness and CO 2 emissions in Malaysia

Abstract: The proposed study will investigate the relationship between the carbon dioxide and its determinants like economic growth, financial development and trade openness for a time period 1970–2012. Theoretical and empirical contradictions in literature exists on the relationship between the variables of the study, but these variables are still very important in determining the CO 2 emissions. In line with the Environmental Kuznets Curve (EKC) hypothesis it is expected that economic growth will improve environmental quality in the long-run. Similarly, it is hypothesized that financial sector development will reduce the CO 2 emissions which will lead to the betterment in quality of environment in case of Malaysia during the study period. It is supposed that increase in the imports of the country will focus on the environmental friendly technology and openness will decrease the level of pollution. The relationship and impact of the variables is unclear and controversial in different case studies and also panel studies, which make it a center of discussion for further research. The proposed study will employ vector error correction model (VECM) approach to investigate the relationship between the variables. For the robustness of results it is suggested to employ impulse response function (IRF) and variance decomposition (VD).

Government Intervention and Financial Sector Development

Abstract: Government interventions in the financial sector have prevailed in a number of countries until the early 1990s. Criticisms against financial repression and poor performance of public banks, however, turned the tide against government intervention. As a result, the 1990s saw the introduction of financial sector reforms in several developing countries with the objectives of improving allocative efficiency of the financial institutions and financial markets. However, the recent global financial crisis has led to a resurgent interest on the role that governments can play in the financial sector.

Role of Remittances in Economic Development: An Empirical Study of World’s Two Most Remittances Dependent Pacific Island Economies

Abstract: In the context of the ongoing world-wide recession and the consequent dim prospects for exports from small Pacific island countries, mobilization of foreign exchange earnings assumes considerable importance. The dependency of Samoa and Tonga on inward remittances is well known, as the two Polynesian island countries in recent years have been amongst the first top ten remittance recipient countries of the world. This paper examines the long-run nexus between economic growth and inward remittances during a three-decade period (1981-2008). The paper also discusses some important policy implications arising out of the study findings.