TITLE

Economic Globalization and Financial Development in East Asia: A Panel Cointegration and Causality Analysis

AUTHOR(S)
Law, Siong Hook; Azman-Saini, W. N. W.; Tan, Hui Boon
PUB. DATE
January 2014
SOURCE
Emerging Markets Finance & Trade;Jan/Feb2014, Vol. 50 Issue 1, p210
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This study examines the role of economic globalization in financial development in eight East Asian economies. The heterogeneous panel cointegration test reveals that cointegration is present among economic globalization, institutions, financial development, real gross domestic product per capita, and financial reforms. The Granger causality test results indicate that economic globalization has a significant causal influence on institutional quality, and institutional reforms have in turn facilitated and supported financial development, in particular of the banking sector in East Asia. Economic globalization is also found to have a favorable causal impact on stock market development without going through the institutional quality channel.
ACCESSION #
96060852

 

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