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Impact of Financial Development on Export Performance: Evidence from South Asia

Author

Listed:
  • Riaz, Kainat
  • Siddique, Hafiz Muhammad Abubakar
  • Audi, Marc
  • Sumaira, Sumaira

Abstract

With the expansion of trade policies in the 1980s, countries began prioritizing foreign trade in their economic strategies, recognizing financial development as a key component. Financial development significantly influences macroeconomic performance and enhances economic growth by positively impacting exports. This study explores the relationship between financial development and export performance in South Asian countries, using panel data from 1990 to 2022. The analysis employs OLS fixed-effects models, FMOLS, DMOLS, and Pedroni co-integration tests. Results from the pooled OLS and fixed-effects models indicate that financial development, foreign direct investment, GDP, and population are key drivers of export performance. The Pedroni co-integration test confirms a long-term relationship among these variables. The findings suggest that promoting appropriate financial development and expanding financial market access are crucial for supporting businesses and boosting export performance in the region.

Suggested Citation

  • Riaz, Kainat & Siddique, Hafiz Muhammad Abubakar & Audi, Marc & Sumaira, Sumaira, 2024. "Impact of Financial Development on Export Performance: Evidence from South Asia," MPRA Paper 122474, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:122474
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial Development; FDI; Export Performance; South Asia;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • G0 - Financial Economics - - General

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