FINANCIAL SECTOR REFORMS AND PRIVATE INVESTMENT IN SUB-SAHARAN AFRICAN COUNTRIES

Financial sector reforms have been undertaken by many countries in Sub-Saharan Africa and one of the key targets of these reforms has been investment. This study conducts an empirical investigation of the effect of financial sector reforms on private investment in selected Sub-Saharan African countries. An index is developed which tracks the gradual progress made with implementation of the phases of the reforms. The results of econometric estimations show that financial sector reforms (measured by the index) have had a positive effect on private investment in the selected countries, thus offering support to the financial liberalization hypothesis.Private Investment, Financial Sector Reforms, Sub-Saharan Africa

Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America

This paper investigates the role of structural reforms ñ privatization, financial reform and trade liberalizationñ as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.http://deepblue.lib.umich.edu/bitstream/2027.42/64417/1/wp906.pd

Financial Sector Restructuring in Pakistan

In this paper an attempt has been made to review the financial restructuring process and its importance for economic growth and macroeconomic stability. The main focus is on the financial restructuring efforts undertaken by the government of Pakistan since 1990. We alsoanalyze the impacts of financial restructuring by using various financial indicators. The overallresults suggest that financial industry in Pakistan showing remarkable and unprecedented growth.Unlike 1990, the performance of financial sector is much better today. After the successfullycompletion of first generation of reforms, the introduction of second generation of reforms arerequired, which helps further strengthen the financial system and transform the benefits of the first generation of reforms to common man.

Financial Reforms and Capital Flows to Emerging Europe

Analysis of 21 emerging European economies reveals a substantial role for domestic financial reforms in attracting net capital flows. Controlling for standard determinants of capital flows, we find in particular banking sector reforms to be consistent with larger current account deficits and net financial inflows, whereas opposite or no effects are found for security market reforms as well as for indicators of financial depth. Additional net inflows are reaped by the EU accession countries. Banking reforms are found to have a significant impact on FDI and “other” investment net inflows; they have a significant effect on gross financial inflows, but not on outflows.

Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America

This paper investigates the role of structural reforms – privatization, financial reform and trade liberalization– as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.privatization, financial reform, trade liberalization, foreign direct investment, Latin America, transition economies

Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America

This paper investigates the role of structural reforms – privatization, financial reform and trade liberalization – as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.privatization, financial reform, trade liberalization, foreign direct investment, Latin America, transition economies

Growth and financial reforms trajectory: an optimal matching sequence analysis approach

This paper makes two important , even if preliminary, methodological contributions to the financial reforms literature. The first contribution is that it introduces a new framework for the metric of sequence analysis, namely, Optimal Matching Sequence Analysis. The second is that it provides an innovative framework namely synthetic counterfactual approach for the assessment of the impact of financial reforms sequence. It shows that the trajectory of financial reforms followed by countries, affects the level and the volatility of GDP per capita growth.Financial reforms trajectory Mundell trilemma Optimal matching sequence analysis

Gradualism and Chinese financial reforms

China ; Banks and banking - China ; Monetary policy - China

Financial Systems and Financial Reforms in CIS Countries

At the beginning of 1990s the Soviet successor states started to transform their financial sectors to meet the needs of the emerging market economies. Following a decade of transition, results differ. Although the Baltic States were able to build quite successful financial systems, in the CIS countries financial systems remain a major obstacle to economic growth. The hyperinflations of the early 1990s, the financial scandals that followed the collapse of monobank systems, and subsequent incomplete progress in constructing non-bank financial institutions and effective regulatory structures have had adverse consequences. These include weak bank balances sheets, high real interest rates, and poor access to capital for small enterprises and start ups. With a few exceptions, nontransparent regulation, inadequate disclosure frameworks, and weak protection of shareholders rights continue to limit investor participation in CIS financial markets. The absence of effective threepillar pension systems further limits the demand for domestic debt and equities. Fortunately, there are signs of improvement. Bank lending and deposits are growing in many CIS economies, the proportion of bad debt in bank credit portfolio is falling, and lending and deposit interest rate spreads are diminishing. The solid economic growth recorded since 1999 in many CIS countries is helping memories of the 1998 financial crisis to fade, and stock exchanges in some CIS countries are currently at or near record levels. Financial systems in CIS economies may be moving toward the successful frameworks put in place in the new EU member states. However, because they have not benefited from the extensive foreign direct investment that recapitalised banks in Central Europe, financial stability in many CIS countries remains open to question. This paper is built as follows. Chapter 2 overviews major reforms in bank and non-bank financial institutions after 1991 followed by analysis of changes in ownership (Chapter 3) and changes in market structure (Chapter 4). Chapter 5 discusses the major trends in the CIS financial sectors and Chapter 6 concludes.financial reform, transition, banks and banking, capital markets

Financial liberalization and financing constraints: some evidence from panel data of listed Chinese firms

This paper examines the impact of recent financial liberalization in China on the financing constraints and investment of publicly-listed Chinese firms. Two continuous indices are constructed to measure the evolution and intensity of financial reforms: a financial liberalization index and a capital control index. Dynamic panel GMM method is used to estimate firms’ financing constraints in an Euler-equation investment model. The results indicate that while smaller firms face significant financing constraints than larger firms, financial liberalization has raised the financing constraints for the latter and failed to relieve the constraints for the former. It appears financial reforms in China have subjected larger firms to greater market discipline but the reforms probably have not been profound enough to benefit smaller firms.Financial liberalization; investments; financing constraints; Chinese firms