Topic
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.
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01 Jan 2017
TL;DR: In this article, the causal interaction among pension funds, financial sector development, and economic growth in emerging market economies over the 2002-2016 period with causality analysis was investigated, which revealed a two-way causality between pension funds and the economic growth, and a one-way causal relationship from financial development to economic growth.
Abstract: Fertility rate is on the downward trend and age dependency ratio is on the rise trend, while the developments in healthcare and welfare increase in the world raise the life expectancy of the individuals. The aforementioned developments endangered the financial sustainability of the public pension systems largely based on pay as you go system and negatively affected public sector budget. As a consequence, many countries supported their one-tiered pension system with private pension plans and occupational pension plans and the size and value of the pension funds’ assets have raised considerably. This study researches the causal interaction among pension funds, financial sector development, and economic growth in emerging market economies over the 2002-2016 period with causality analysis. The causality analysis revealed a two-way causality between pension funds and economic growth, and a one-way causality from financial development to the economic growth and from financial development to the pension funds.
1 citations
Posted Content•
TL;DR: In this article, the authors employed Panel Smooth Transition Models (PSTR) to examine the financial integration and economic growth relationship for a large panel data set consisting of 82 countries and for three subsamples, namely emerging, industrial, and developing countries, for 1970-2010 periods.
Abstract: This paper employs Panel Smooth Transition Models (PSTR) to examine the financial integration and economic growth relationship for a large panel data set consisting of 82 countries and for three subsamples, namely emerging, industrial, and developing countries, for 1970-2010 periods. Unlike linear specifications with interaction terms, PSTR models are flexible enough to endogenously determine how the degree of institutional quality, financial sector development, trade openness, budget deficit, inflation volatility and financial integration can have a role in revealing asymmetries in financial integration-growth nexus. Except developing countries, empirical results strongly indicate nonlinear dynamics and imply that the impact of financial integration on growth is asymmetric depending on the threshold effects of these variables which show great variation not only from variable to variable but also for different country groups. As far as whole set of countries is concerned, our findings imply that countries having developed financial systems, qualified institutions and stable macroeconomic environment seem to be benefiting from financial integration. Moreover, nonlinear threshold effects are more apparent and different for emerging countries compared to the industrial countries. Unlike former economies, higher levels of financial integration and trade openness decrease benefits from financial openness for the industrial countries. Besides, high fiscal deficit has more pronounced negative effect on the growth of the industrialized countries compared to emerging economies and other indicators.
1 citations
TL;DR: The credit risk database (CRD) as discussed by the authors makes it possible to mitigate the problem of information asymmetry between small and medium-sized enterprises (SMEs) and financial institutions and contributes to improving SMEs access to finance by collecting a large number of financial statements through the mechanism of SME finances and establishing a robust statistical model.
Abstract: The credit risk database (CRD) makes it possible to mitigate the problem of information asymmetry between small and medium-sized enterprises (SMEs) and financial institutions and contributes to improving SMEs’ access to finance by collecting a large number of financial statements through the mechanism of SME finances and establishing a robust statistical model. We use the CRD in Japan, confirm the situation in Japan, and highlight the CRD’s contribution to evaluating the creditworthiness of SMEs. We also explain how to establish the CRD as a financial infrastructure, while indicating that the CRD and the scoring model based on it have maintained their quality owing to their operating system. We hope our experience contributes to the introduction of a statistical credit risk database composed of a large number of anonymous financial statement data in other countries and that the CRD helps to improve SMEs’ access to finance as a financial infrastructure.
1 citations
TL;DR: In this paper, the causal relationship between the inflows of Foreign Direct Investments (FDI) and the financial development with mitigated success in African countries, especially in ECOWAS member countries, was analyzed.
Abstract: Many studies have attempted to highlight the causal relationship between the inflows of Foreign Direct Investments (FDI) and the financial development with mitigated success in African countries, especially in ECOWAS member countries. For the most part, these studies have simply showed the importance of FDI and financial development in achieving GDP. To refocus the debate, this article analyzes in ECOWAS member countries the causal relationship between our variables of interest using recent causality techniques: time domain Granger (1969), Toda and Yamamoto (1995) and Breitung and Candelon (2006). Overall, country-by-country estimates revealed evidence of significant links between FDI inflows and financial sector development in terms of unidirectional as well as bidirectional causalities. Essentially, the findings imply that policymakers should not only address the causal direction between FDI inflows and financial development but also whether it is temporal or permanent and therefore authorities must define measures to be taken accordingly.
1 citations
08 Jan 2019
TL;DR: In this article, service performance guarantees are proposed as a promising approach to addressing the issue of inadequate delivery of key services like electricity and other utilities that private firms and investors rely on.
Abstract: Emerging market countries require substantial foreign investment for development, economic growth,and poverty alleviation. There are multiple challenges to attracting this investment, however, ranging from political and economic instability to corruption, poor security, and small market size. An additional challenge is inadequate delivery of key services like electricity and other utilities that private firms and investors rely on. Service performance guarantees are a promising approach to addressing this issue. These guarantees enable firms to purchase protection against poor or insufficient service delivery, and they may work particularly well in industrial or export processing zones by ensuring that shortfalls in service delivery are measured, reported, and addressed in a timely manner.
1 citations