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.

Sectoral FDI and the real exchange rate: The role of financial development

Abstract: Increasing FDI inflows into a booming sector resulting in an appreciation of the real exchange rate may entail further capital inflows and greater appreciation pressure on the real exchange rate up to an abrupt reversal of the capital (Botta, 2015). The macroeconomic instability of such boom-and-bust cycles is detrimental to economic growth, as is the appreciated real exchange rate. This paper applies dynamic system generalized methods of moments (GMM) estimation techniques to empirically find different effects of foreign direct investment (FDI) inflows into the main economic sectors on the real exchange rate in a panel of 66 developing and developed economies. While the effect of FDI in the primary sector appears to be insignificant, FDI in the manufacturing and in the service sector lead to a real depreciation and a real appreciation respectively. Furthermore, evidence suggests that financial sector development may help in dampening the real exchange rate movements induced by FDI in the latter two sectors, as well as distinctly attenuates the real appreciation effect of other capital inflows. Hence, deep financial markets seem to contribute to the mitigation of macroeconomic instability in consequence of capital inflows.

Evaluating the Correlation between the Financial Sector Development and the Exports of Middle Eastern Countries

Abstract: With the aim to evaluate the correlation between the exports of 3T Middle Eastern countries 3T and financial sector development, this study explains the relationship between the Institutional environment, Business environment, Financial stability, Financial Banking Services, Financial Non-banking Services, Financial markets and Financial access with the exports of Middle Eastern countries in 6 selected countries during the years 2008 to 2011. This research is applied based on the objective, has the library type based on the data collection and is among the correlative studies based on the method; it seeks to explain the relationship and calculate the amount of correlation and coefficients of each of the independent variables with the energy consumption by using the econometric models. Data and information needed for the research are collected based on the method of document library studies and the information related to the research variables are extracted by referring to the websites of 3T International 3T 3T Association of 3T 3T Economics and 3T 3T UNCTAD 3T 3T Organization 3T . First, the reliability or 3T stability 3T of variables used in various forms was determined by using the reliability determining tests such as the Dickey-Fuller unit root test. The accuracy test of classical assumptions was done for estimated functions and 3T assurance 3T of 3T desired 3T 5T 3T 5T estimations accuracy 3T and 3T assurance 3T of estimated relationship and long-term and 3T balance 3T coefficients of independent variables. Evaluation of 3T stability 3T (

The banking and financial sector of Lao PDR : financial sector note

Abstract: During the second half of the 1980s, Lao PDR embarked on an ambitious program of economic reforms, called the New Economic Mechanism, whose main purpose was to gradually transform its centrally-planned economy into a market-oriented economy. The initial reform momentum lasted about one decade. The far-reaching reform program encompassed many critical components including: (a) promotion of private production through improved incentives; (b) institutional infrastructure to improve market economy operations; (c) the strengthening of Lao comparative advantages through trade liberalization and further specialization; and (d) the establishment of price stability through macroeconomic policy measures. The systemic changes introduced in Lao PDR have contributed to a significant transformation of the country’s economic system, away from a rigorously centrally-planned economy and towards a form of market economy based on private ownership. The percentage of poor declined based on the national poverty line from 45 to 39 percent between 1992-93 and 1997-982. But the percentage of very poor did not decline and remained at slightly above 30 percent evidencing the need for even broader and faster growth. Moreover, several factors slowed down the economic liberalization process. Such factors included the lack of transparency in government-business relations, a weak civil society, the position of some interest groups at the national and provincial levels, and the existence of noncompetitive economic structures with a few firms and actors accounting for a large share of domestic production (except in agriculture). In some areas, reform policy stagnated and is lagging. This is the case in the financial sector. The creation of a two-tier banking system in the early 1990s with separate and well-defined functions for the central bank and the state-owned commercial banks, has not resulted in the expected benefits: Lao PDR is still suffering from chronic macroeconomic instability and the state-owned commercial banks are suffering from a large amount of non-performing loans. Taking into consideration the objective of the Lao leaders to improve the well-being of the Lao People, this paper argues that there are valid reasons for establishing rules that discipline the political influence on the design and conduct of economic policy, and more specifically, policy regulating the financial sector.