Location of Repository

The Impact of Financial Liberalisation Policies on Financial Development: Evidence from Developing Economies

By Philip Arestis, Panicos O. Demetriades, Bassam A. Fattouh and Kostas Mouratidis


We collect data on a number of financial restraints, including restrictions on deposit and lending interest rates and reserve and liquidity requirements, from central banks of six developing countries. We estimate the effects of these policies on financial development, controlling for the effect of economic development and using standard econometric techniques. We find that the effects of financial policies vary considerably across our sample of countries. Our findings demonstrate that financial liberalisation is a much more complex process than has been assumed by earlier literature and its effects on financial development are ambiguous

Topics: Financial Development, Financial Liberalisation, Cointegration Analysis
Publisher: Dept. of Economics, University of Leicester
Year: 2002
OAI identifier: oai:lra.le.ac.uk:2381/4455

Suggested articles



  1. (1994). Banking on Financial Reform ? A Case of Sensitive Dependence on Initial Conditions”, doi
  2. Dem etriades (1997), “ Financial Developm ent and Econom ic Growth: Assessing The Evidence”,
  3. (1995). Efficient Inference in Cointegration Param eters in Structural Error Correction M odels”, doi
  4. (1996). Financial developm ent and Econom ic growth: Cointegration and Causality Tests for 16 Countries”,
  5. (1996). Financial Developm ent, Econom ic Growth and Banking Sector Controls: Evidence From
  6. (1993). Finite-Sam ple Sizes of Johansen’s Likelihood Ratio Tests for Cointegration”, doi
  7. (1989). Is Public Expenditure Productive?”, doi
  8. (1993). Looting: The Econom ics Underworld of Bankruptcy for Profit”, Brooking Papers on Economic Activity. doi
  9. (1994). m elberg
  10. (1994). M odeling Linear Dynamic Econometric Systems ”,
  11. (1998). Productivity and Financial Sector Policies: Evidence from South East Asia”, doi
  12. (1993). Public Capital and Long-Run Costs doi
  13. (1994). SOURCES: Annual reports of central banks; IM F Annual Report on Exchange Restrictions (various issues); Caprio, Atiyas, and Henson
  14. (1988). Statistical Analysis of Cointegrating Vectors”, doi
  15. (1994). Sum m ers
  16. (2001). Unproductive Credit and the South Korean Crisis”,CeFiM

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.