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The role of domestic financial and economic development in financial integration |
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| Authors: | Kent Jason G Cheng Sarah Lynne S Daway |
| Institution: | 1. Institute of Health Policy and Development Studies, National Institutes of Health, University of the Philippines Manila, Manila, Philippines;2. School of Economics, University of the Philippines Diliman, Quezon City, Philippines;3. School of Economics, University of the Philippines Diliman, Quezon City, Philippines |
| Abstract: | Using two-step system generalized method-of-moments on an unbalanced panel of 75 countries from 1996 to 2010, this study shows that financial development’s effect on the pace of a country’s financial integration is conditional on economic development. Indeed, the results validate the observation that greater financial development conditioned on similar levels of economic development should precede closer financial integration. |
| Keywords: | Financial integration financial development economic development system generalized method-of-moments estimator |