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.

Infrastructure and Finance: Evidence from India's GQ Highway Network

Abstract: This paper uses the construction of India's Golden Quadrangle central highway network, together with comprehensive loan data from the Reserve Bank of India, to investigate the interaction between infrastructure development and financial sector depth. The paper identifies a disproportionate increase in loan count and average loan size in districts along the Golden Quadrangle highway network, using stringent specifications with industry and district fixed effects. The results hold in straight-line instrumental variable frameworks and are not present in placebo tests with another highway that was planned to be upgraded at the same time as Golden Quadrangle but subsequently delayed. Importantly, however, the results are concentrated in districts with stronger initial financial development, suggesting that although financing responds to large infrastructure investments and helps spur real economic outcomes, initial financial sector development might play an important role in determining where real activity will grow.

International Financial Regulation, Access to Finance, Systemic Stability, and Development

Abstract: Global financial markets are subject to a complex web of soft law rules and standards called International Financial Regulation. The main rationales/objectives of International Financial Regulation revolve around the protection of investors and depositors and the safeguarding of financial system stability. In recent months International Financial Regulation has come under attack for its lack of proper structures and flawed rules, which have been held to be among the main causes of the global credit crisis. As a result, a major reform exercise is under way. This paper argues that, as part of this reform, policy makers and regulators must attempt to widen the objectives of International Financial Regulation so that they become cognizant of the impact of financial sector development and access to finance on economic growth and poverty eradication. In this context, the paper proposes a global licensing scheme for international investment funds and the reform of the Basle Capital Adequacy Standards. Implementation of the proposals would enable International Financial Regulation to both strengthen the global financial stability framework and facilitate access to finance in poor and very poor countries.

Remittances and financial development in Sub-Saharan African countries: A system approach

Abstract: This paper investigates the causality between remittances and financial sector development in Sub-Saharan African (SSA) countries. To this end, we employ the panel Granger causality testing approach that is based on Seemingly Unrelated Regressions (SUR) multivariate systems and Wald tests with country specific bootstrap critical values. Using annual data over the 1980–2010 period for 19 SSA countries, the study gives the following results. Based on liabilities as a proxy for financial sector development, remittances positively influence financial development only in four countries (Niger, Senegal, Sierra Leone and Sudan) and financial development positively impacts remittances only in Gambia. On the contrary, considering credit to measure financial depth, the results show that remittances positively affect financial development only in Sudan and financial development does not influence remittances in any country. Consequently, there is no strong evidence supporting the view that remittances promote financial development in SSA countries and financial development seems not to be a relevant determinant of remittances received in SSA countries. (This abstract was borrowed from another version of this item.)

Competition and Financial Sector Development in Sri Lanka

Abstract: This paper analyses competition in the banks and its contribution to financial sector development in Sri Lanka during 1960 - 2010. Competition is analyzed by considering trends in the identified indicators for state banks and other banks, and it observes that there has been an intensified competition among the commercial banks. The paper recognizes that banks’ competition has positively contributed to improve services and the products of the financial sector. However, it concludes that favorable developments in the financial sector are not only due to competition but also due to other macroeconomic and policy changes, which cannot be separately measured and the financial sector has grown remarkably in Sri Lanka. Sri Lanka Journal of Advanced Social Studies Vol. 2 - No.1 Page 68-92 DOI: http://dx.doi.org/10.4038/sljass.v2i1.5119

Private Participation in Infrastructure and Financial Sector Development: Evidence from Developing Countries

Abstract: This article studies whether private participation in infrastructure (PPI) investments promote financial sector development (FSD). With data from 62 developing countries over the period 1990–2013, ...