Financial Liberalization, Banking Crises and Economic Growth: The Case of South Mediterranean Countries
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Ousama Ben Salha
,
Tarek Bouazizi
Abstract
The central aim of this paper is to empirically assess the effects of financial liberalization on economic growth in the presence of banking crises. Our empirical investigation is based on a dynamic panel model for a sample of 10 South Mediterranean countries during the period 1980-2005. Results suggest that equity market liberalization positively affects economic growth in these countries, especially in the period of fragility and banking crises. Capital account liberalization, however, has no significant effects. As expected, banking crises exert negative effects on economic growth. When we control for the presence of macroeconomic stability and appropriate openness sequencing, the anticipated effects of capital account liberalization become significant. We conclude that macroeconomic reforms and trade opening are both crucial prerequisites for the success of the capital account liberalization process.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Artikel in diesem Heft
- Article
- Impact of FDI Restrictions on Inward FDI in OECD Countries
- Exchange-Rate Volatility and Industry Trade Between Japan and China
- Do Tax Havens Really Flourish?
- Financial Liberalization, Banking Crises and Economic Growth: The Case of South Mediterranean Countries
- New Evidence on the Relationship Between Economic Freedom and Growth: A Panel Cointegration Analysis for The Case of OECD
- What's New in Our World?
- Does China Still Have a Labor Cost Advantage?
- Impact of Globalization on Income Distribution Inequality in 60 Countries: Comments
- Do Immigrant Students Succeed? Evidence from Italy and France
