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The Effect of Financial Liberalization through the General Agreement on Trade and Services on Economic Growth in Developing Countries

Author

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  • Hazem Al Samman

    (Department of Accounting and Finance, at College of Commerce and Business, Dhofar University, Dhofar, Sultanate of Oman,)

  • Chadi Azmeh

    (Department of Banking and Financial Sciences, International University for Science and Technology, Damascus, Syria.)

Abstract

This study investigates the influence of financial liberalization on economic growth in developing countries indirectly through their effect on financial development. It selects the size and activity of the financial system as indicators of financial development. The general agreement on trade and services (GATS) is a very useful option for developing countries to consolidate their financial sector reform to give foreign investors more certainty about financial investment opportunities in the economies of developing countries. This study chooses the level of commitments taking by developing countries in the GATS in banking sector as a measure of financial liberalization. The main objective is to examine the effect of developing countries financial liberalization commitments at the GATS on economic growth through their effect on the size and activity of the financial sector. According to the analysis conducted, the results show no real effect of the level of commitments taking by developing countries in the GATS on economic growth through their effect on the size and activity of financial development. Even though the effect of financial development on economic growth is positive, the effect of financial liberalization through the GATS on financial development is almost zero.

Suggested Citation

  • Hazem Al Samman & Chadi Azmeh, 2016. "The Effect of Financial Liberalization through the General Agreement on Trade and Services on Economic Growth in Developing Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 855-860.
    • Handle: RePEc:eco:journ1:2016-03-5
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    References listed on IDEAS

    as
    1. OZTURK, Ilhan, 2008. "Financial Development And Economic Growth: Evidence From Turkey," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(1), pages 85-98.
    2. Philip Arestis & Panicos Demetriades, "undated". "Finance and growth: Institutional Considerations and Causality," Working Papers 9605, University of East London, Department of Economics.
    3. Bayraktar, Nihal & Wang, Yan, 2006. "Banking sector openness and economic growth," Policy Research Working Paper Series 4019, The World Bank.
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    Cited by:

    1. Chadi Azmeh, 2022. "Quantity and quality of research output and economic growth: empirical investigation for all research areas in the MENA countries," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(11), pages 6147-6163, November.

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    More about this item

    Keywords

    Financial Liberalization; Economic Growth; Developing Countries; General Agreement on Trade and Services; Financial Development;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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