International financial integration: Too much?
[ X ]
Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Access Rights
info:eu-repo/semantics/openAccess
Abstract
According to theory, financial openness (FO) increases growth. The literature often conditions the growth effect of FO on favorable collateral environment. However, this can conceal the actual growth benefits of FO. This paper contributes to the literature by investigating the unconditional growth effect of FO, measured as de facto international financial integration (IFI). We maintain that the level of IFI might affect the structure of this relationship. We examine this important issue in advanced and emerging market and developing economies over the 1990-2019 period using conditional and unconditional growth regressions. Panel fixed effects threshold and dynamic panel threshold estimations suggest that the IFI-growth relation is conditional on data-driven estimated threshold level of IFI. Accordingly, IFI encourages (impedes) growth in less (more) financially integrated economies. The results show that it is not impossible to finance growth with IFI, but it might be risky, especially beyond a certain threshold level of IFI.Copyright & COPY; 2022 Borsa Istanbul Anonim S, irketi . Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Description
Keywords
Advanced economies, Emerging market and developing economies, Growth, International financial integration, Panel threshold model
Journal or Series
Borsa Istanbul Review
WoS Q Value
Q1
Scopus Q Value
Q1
Volume
23
Issue
2
