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Institutional governance and financial sector development: Panel evidence from Asian economies

Year: 2021

Type: article

Abstract: Current study aims to investigate the impact of institutional governance (GOV), trade openness (TOPEN), real output (RGDP), economic freedom (EFR), inflation rate (INFR) and real output growth on financial sector development (FSD) of selected Asian economies. A consolidated financial sector development index, representing banking sector and stock market is generated using Principal Component Analysis (PCA). The study conducted data analysis by applying panel estimation method of Generalized Method of Moments (GMM), and showed that trade openness, and real output moderate the financial development (FSD) through its positive interaction with institutional governance (GOV). The findings highlight that governance is an important and crucial driver of financial sector development and stock market development in four selected Asian economies.

Source: Cogent Economics & Finance

DOI: 10.1080/23322039.2021.1890367

Authors: Nazima Ellahi, Adiqa Kiani, Qaisar Malik, Asif Raza, Raazia Gul

Institutions: Foundation University Islamabad, Federal Urdu University

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,165