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.

Natural Resource Rent and Finance: The Moderation Role of Institutions

Abstract: This study empirically examines the nexuses between the natural resource rent and financial development in the context of the emerging economy of Pakistan, between 1984 and 2018, by subsuming the important role of institutional quality in this context under symmetric, asymmetric, and threshold settings. The literature to date provides no evidence on the asymmetric relationship between natural resource rent and financial development, and the moderation role of institutional quality in this connection. We show that natural resource rent negatively influences financial development, whereas institutional quality boosts financial development and positively moderates the relationship in the context of Pakistan. Also, we find a single significant threshold value of 3.097 above which the relationship of resource rent-finance turns nonlinear—as up to this threshold the coefficient is 3.228, which declines slightly to 2.804 above the threshold level. This implies that regulators should maintain at least an institutional quality level of up to 3.097 to experience the most desired financial benefits of the natural resource rent in Pakistan. Moreover, the results corroborate the existence of asymmetries in the relationship between the natural resource rent and financial development. This empirical evidence provides fresh insight for stakeholders regarding ambiguous natural resource rents and financial sector development nexuses and recommends that planning organs in Pakistan and other countries in a similar development cadre should use institutional quality as a tool to avoid the resource curse and view natural resources as a blessing rather than a curse.

Financial Development in Emerging Markets: The Indian Experience

Abstract: Financial markets that function well are crucial for the long-run economic growth of a country. This paper, in the first instance, looks at how the financial development of an economy can be measured. It then traces the financial development of India through the 1990s to the present, assessing the development of each segment of financial markets. In doing so, it highlights the dualistic development of the financial sector. Finally, the paper makes an attempt to offer an explanation of this dualistic development and proposes a road map for the future development of financial markets in India.

Scenarios for branchless banking in 2020

Abstract: The growing use of branchless banking channels over the coming years is inevitable in most countries. But it's far less certain whether large numbers of the unbanked poor will use these alternative channels for financial services beyond payments, such as savings and credit. Consultative Group to Assist the Poor (CGAP) and Department for International Development (DFID) undertook a six-month scenario-building project in which almost 200 experts from more than 30 countries helped answer the question 'How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020?' Notwithstanding recent hype, branchless banking for the poor is at an early stage of development. It is conceivable that a majority of those who today do not have access to formal financial services may have access to electronic payment instruments by the end of the next decade. Wiring electronic payment highways is a worthwhile goal for the decade. But it is not sufficient. To ensure that poor people use branchless banking and to create opportunities that could help alleviate poverty, both governments and providers should track adoption patterns closely and understand customer needs. Private sector players should recalibrate their return expectations: achieving robust, scalable branchless business models will take time, most likely longer than expected. Government activism can be a powerful force for encouraging wider and broader reach of branchless services if regulators successively enable innovation by making markets for financial services competitive through stages of development. In addition, governments can promote financial inclusion by ensuring that their own welfare and salary payments are delivered via branchless channels.

The Synergy of Financial Sector Development and Information Sharing in Financial Access: Propositions and Empirical Evidence

Abstract: This study assesses the role of information sharing in financialization (or coexistence of financial sub-systems) for financial access. The empirical evidence is based on contemporary and non-contemporary Fixed Effects and Quantile regressions on 53 African countries for the period 2004-2011. The positive complementarity of information sharing offices (ISOs) and financial formalization is an increasing function of financial activity (or access to credit) whereas the negative complementarity of ISOs and financial informalization is a decreasing function of financial activity. In order to leverage on the synergy between ISO and financial formalization for enhanced financial access, some policy measures are proposed.

FDI Spillovers and the Role of Local Financial Markets: Evidence from Mexico

Abstract: This paper presents new microeconomic evidence on the link between financial sector development, financial globalization and productivity. Using data of Mexican manufacturing firms operating in 1991, 1998 and 2000 it is found that in general, larger firms benefit from FDI in their same region of activity. However, domestic firms only enjoy productivity increases from FDI if they are relatively large and located in financially developed regions. All the findings are robust to instrumenting for financial development using historical conditions.