Determinants of Financial Development
|Author:||Mgr. Bzhalava Eri|
|Year:||2014 - summer|
|Leaders:|| prof. Roman Horváth Ph.D.
|Work type:|| Masters
|Awards and prizes:|
|Abstract:||The paper studies effects of country level determinants on the rate of financial development and,
in particular, assesses the empirical question whether democracy and political freedom can
enhance financial development, as measured by Bank Private Credit t
o GDP and Liquid
Liabilities to GDP. Using Fixed Effects estimation techniques and a panel data for a list of 39
countries over the period 1990 to 2011, we provide evidence that suggests positive link between
political openness and financial development. T
he empirical evidence also confirms financial
openness and real per capita income to be positively correlated to financial deepening and in
contrast, we find that size of financial sector does not spur the rate of financial development.