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The Determinants of Financial Development: Empirical Evidence from Developed and Developing Countries

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  • Hamdi Khalfaoui

Abstract

Countries which initiate economic development, use in the most cases, the mechanisms and tools of the financial sphere to maximize the chances of success of their financial development process. However, some financial, economic and institutional conditions are compulsory for the success of the whole process. In this context, our empirical analysis using panel data is applied on two samples divided among 15 developed and 23 developing countries over a period from 1997 to 2013.The result obtained show that financial development determinants are mainly related to banking and financial sector and the level of economic and human development for both samples. Whereas, the determinants related to economic stability and the legal and institutional framework have a significant impact on financial development only in the developed countries.

Suggested Citation

  • Hamdi Khalfaoui, 2015. "The Determinants of Financial Development: Empirical Evidence from Developed and Developing Countries," Applied Economics and Finance, Redfame publishing, vol. 2(4), pages 1-9, November.
    • Handle: RePEc:rfa:aefjnl:v:2:y:2015:i:4:p:1-9
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    Citations

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    Cited by:

    1. Maryam Barzegar Marvasti & Somayeh Razzaghi, 2020. "Investigating the Determinants of Financial Development in OPEC Countries: An Application of Bayesian Model Averaging Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 342-352.
    2. Muhammad Suhail Saleem & Asad Abbas & Dr Muhammad Ramzan Sheikh & Sana Sultan, 2024. "Financial Development in the SAARC Region: Identifying Influential Factors," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 513-525.
    3. Fisnik Morina & Duresa Kilaj & Sadri Alija, 2024. "Nexus between Macroeconomic Factors and Financial Development: Empirical Evidence from Transition Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 3-26.
    4. Ofori, Isaac K. & Quaidoo, Christopher & Ofori, Pamela E., 2021. "What Drives Financial Sector Development in Africa? Insights from Machine Learning," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    5. Chris Doucouliagos & Jakob de Haan & Jan-Egbert Sturm, 2022. "What drives financial development? A Meta-regression analysis [A new database of financial reforms]," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 840-868.
    6. Feyisa Habtamu Legese & Mamo Wondmagegn Biru & Yitayaw Mekonnen Kumlachew, 2022. "The Impact of Governance on Financial Institution and Financial Market Development: Empirical Evidence from Emerging Markets," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(3), pages 48-64, September.
    7. Wu, Yingjia & Cao, Nannan & Muda, Iskandar & Rady, Ahmed & Abduvaxitovna, Shamansurova Zilola, 2024. "Financial development and natural resource nexus: Evaluating the importance of mineral in BRICS economies," Resources Policy, Elsevier, vol. 89(C).

    More about this item

    Keywords

    financial development; macroeconomic stability; legal and institutional environment; developed and developing countries; panel data;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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