The nexus of financial liberalization and economic growth: Is Vietnam different

2022 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Vu Than Nguyen ◽  
Xuan Dung Nguyen ◽  
Thi Thuy Hang Le ◽  
Nga Hang Thi Phan
Keyword(s):  
Economic Growth ◽  
Financial Liberalization

scholarly journals Relationship between Financial Liberalization and Economic Growth in Emerging Economies: The Case of Vietnam

2016 ◽  
Vol 23 (01) ◽  
pp. 25-49
Author(s):  
Hoang Tran Huy ◽  
Huan Nguyen Huu ◽  
Linh Nguyen Thi Thuy
Keyword(s):  
Economic Growth ◽  
Financial Services ◽  
Financial Liberalization ◽  
Response Analysis ◽  
Causality Test ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Term Relation

This paper examines the process of financial liberalization in Vietnam over the period from 1993 to 2013. On adopting Vector Error Correction Model (VECM), the results suggest that there is a long-term relation between economic growth and financial liberalization, in which the financial market liberalization and financial services liberalization provide better support during the growth of Vietnam’s economy. In addition, using various techniques including Granger causality test, impulse response analysis, and variance decomposition, the paper also clarifies the motives for financial liberalization from the process of short-term financial development and economic growth in the country.

Does Financial Liberalization and Trade Openness Promote Growth in South Asia?

2010 ◽  
pp. 101-132
Author(s):  
Muhammad Arshad Kahn
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Inflation Rate ◽  
Financial Liberalization ◽  
Trade Openness ◽  
Real Output ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run

This chapter examines the hypotheses that trade liberalization and financial liberalization jointly enhances economic growth in the four South Asian countries including Bangladesh, India, Pakistan and Sri Lanka for the period 1970-2007 using bounds testing approach to cointegration. The results suggest that in the long-run except for Bangladesh, financial development plays no role in promoting economic growth in these countries. Furthermore, the results suggest that trade openness plays a significant role in promoting economic growth in Bangladesh and India, while exerts negative effect on Pakistan and no effect on Sri Lanka. The share of domestic investment influences real output significantly in Bangladesh, India and Pakistan. In the long- as well as short-run two-way causality between real output, trade openness, share of investment and inflation rate exists for the case of Bangladesh and India. For the case of India two-way causality between finance and growth exists in the short-run. For the case of Pakistan, there is an evidence of long-run causality between real output, finance, trade openness, share of investment and inflation rate. However, in the short-run, two-way causality between real output, trade openness and share of investment is existed and one-way causality between inflation rate, trade openness and share of investment is also observed. No evidence of short-run causality between finance and growth and vice versa for Pakistan has been seen. Finally, for Sri Lanka, an evidence of long-run causality between real output, finance, trade openness and investment share has been found. In the short-run one-way causality between finance-growth, trade-finance, trade-growth and trade-investment has been obtained. These mixed results suggest that the authorities may focuses more and more on the trade liberalization. In addition, there is a need to further deepen the banking and stock markets and provide investment friendly environment to enhance domestic investment which, in turn, promotes economic growth.

Financial Liberalization, Economic Growth, and Capital Flight: The Case of Pakistan Economy

2021 ◽  
pp. 115-134
Author(s):  
Ma Degong ◽  
Raza Ullah ◽  
Farid Ullah ◽  
Shahid Mehmood
Keyword(s):  
Economic Growth ◽  
Financial Liberalization ◽  
Capital Flight

Financial Liberalization, Crises, and Economic Growth

2008 ◽  
Vol 7 (1) ◽  
pp. 106-115
Author(s):  
Inkoo Lee ◽  
Jong-Hyup Shin
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Financial Liberalization ◽  
Probit Model ◽  
Developed Countries ◽  
Sample Group ◽  
Panel Model ◽  
Catching Up ◽  
Nominal Interest Rates ◽  
The Developed Countries

The paper computes the effect of financial liberalization on economic growth by combining the results of a panel model with those of a probit model. It finds a positive net effect from financial liberalization to growth. Surprisingly, we find that the net effect on growth is larger in the crisis-experienced country group than in the overall sample group. Our guess is that the crisis-experienced countries are mostly developing countries that usually enjoy higher growth rates than the developed countries because of the catching-up phenomenon. The paper also studies the link between financial liberalization and nominal interest rates, and finds, contrary to expectations, that the direct liberalization effect is positive. Our guess is that this reflected the overshooting of interest rates after crises.

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