Introducing a New Broad-Based Index of Financial Liberalization in Developed and Developing Countries

Authors

  • Salma Zahir Lecturer, Department of Economics, Higher Education, Archives and Libraries Department, KP, Pakistan
  • Bareera Fyiaz PhD. Scholar, Department of Economics, University of Peshawar, Pakistan
  • Shadab Mehar Department of Economics, Women& University Swabi
  • Aiman Akbar Department of Economics, Women University Swabi

Abstract

The effect of Financial Liberalization (FL) on Economic Growth (EG) has been extensively studied in the literature. In typical empirical research, one of two measures of Financial Liberalization—the ratio of private credit to GDP or stock market capitalization to GDP—is used to approximate Financial Liberalization (FL). These measures, however, do not account for the dynamic, multidimensional aspect of Financial Liberalization (FL). This study contributes by developing six (06) indices that represent the ratio of Broad Money to the Gross Domestic Product (M 2 / GDP), Gross Domestic Saving (GDS), Domestic Credit to Private sector (CRDTP), Domestic Credit to the Private Sector by the Banks (CRDT B), FDI Net Inflow (FDINF), and FDI Outflow (FDIOUF). An overall indicator of Financial Liberalization (FL) is created by combining these indexes. The database should offer scholars and decision-makers a helpful analytical tool given that it covers 08 of the 25 sample countries that are developed countries and the remaining 17 countries are developing nations yearly between 1995 and 2020.

Keywords: Financial Liberalization Index

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Published

2023-09-10

Issue

Vol. 2 No. 2 (2023): Journal of Business and Management Research

Section

Articles

How to Cite

Introducing a New Broad-Based Index of Financial Liberalization in Developed and Developing Countries. (2023). Journal of Business and Management Research, 2(2), 137-166. https://jbmr.com.pk/index.php/Journal/article/view/28