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Financial Liberalization and Performance in Sri Lanka

Author

Listed:
  • Ramesh Chandra Paudel

    (Ramesh Chandra Paudel, School of Economics, University of Wollongong, NSW 2522, Australia.)

  • Kankesu Jayanthakumaran

    (Kankesu Jayanthakumaran, School of Economics, University of Wollongong, NSW 2522, Australia, Email: kankesu@uow.edu.au)

Abstract

From the 1950s to the early 1970s, Sri Lankan governments pursued controls on the financial sector and have further reduced controls since 1977. This article links those financial sector reforms (falling controls) and the financial sector performance of Sri Lanka by testing hypotheses estimating cointegration with the ordinary least square (OLS)-based auto regressive distributed lag (ARDL) approach. Results show limited support for the liberalization and efficiency hypotheses that falling controls are associated with widening the financial sector and motivating investments. Results provide no support for the hypotheses that falling control is associated with deepening and improving the financial sector.

Suggested Citation

  • Ramesh Chandra Paudel & Kankesu Jayanthakumaran, 2009. "Financial Liberalization and Performance in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(1), pages 127-156, January.
    • Handle: RePEc:sae:soueco:v:10:y:2009:i:1:p:127-156
    DOI: 10.1177/139156140901000106
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    References listed on IDEAS

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    Cited by:

    1. Ramesh Chandra Paudel & Tara Prasad Bhusal, 2021. "Role of Workers Remittances in Export Performance of Nepal: Gravity Modelling Approach," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 33(1-2), pages 1-13, October.
    2. Ramesh C. Paudel & Chakra Pani Acharya, 2022. "Cooperatives and economic growth in a developing country: The case of Nepal," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 797-815, September.
    3. Tulus Suryanto & Darul Dimasqy & Reza Ronaldo & Mahjus Ekananda & Teuku Heru Dinata & Indra Tumbelaka, 2020. "The Influence of Liberalization on Innovation, Performance, and Competition Level of Insurance Industry in Indonesia," Sustainability, MDPI, vol. 12(24), pages 1-25, December.
    4. Rohan Byanjankar & Mira Sakha, 2021. "Role of Remittances on Rural Poverty in Nepal-Evidence from Cross-Section Data," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 33(1-2), pages 45-72, October.

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    More about this item

    Keywords

    JEL: C32; JEL: C38; Sri Lanka; Financial Sector; Liberalization; ARDL Approach;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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