Does financial liberalization matter for emerging East Asian economies growth? Some new evidence

This paper investigates the empirical relationship between financial liberalization and economic growth in East Asian region. The empirical literature suggests that there is a mixed link between financial liberalization and growth in emerging countries. Panel data techniques using LS, TSLS, and GMM are employed to shed some light on the empirical debate, we examine this issue in 6 major emerging East Asian countries over the period 1980–2002. The main result is that financial liberalization's growth effect depends on the nature as well as the intensity of financial sectors liberalization. Full liberalization of the financial sector has been associated with slower growth outcomes while more moderate partial liberalization is associated with more positive outcomes.