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Financial Liberalization, Banking Crisis and Economic Growth in MENA Region: Do Institutions Matter?

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  • RACHDI, Houssem
  • Hakimi, Abdelaziz
  • Hamdi, Helmi

Abstract

The main purpose of this study is to investigate the interaction between financial liberalization, banking crisis and economic growth by taking into consideration the role of institutions. Our sample covers ten Middle East and North African (MENA henceforth) observed during the period 1990-2013. Using a dynamic panel data framework, our findings reveal that financial liberalization increases the likelihood of systemic banking crisis at the initial stages of financial reform, but there is a threshold level after which financial liberalization can have a positive impact on economic growth by reducing the probability of crisis. The results also suggest that all indicators of institutions play a less significant role in economic growth.

Suggested Citation

  • RACHDI, Houssem & Hakimi, Abdelaziz & Hamdi, Helmi, 2015. "Financial Liberalization, Banking Crisis and Economic Growth in MENA Region: Do Institutions Matter?," MPRA Paper 64562, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64562
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    Cited by:

    1. Klaus Schmidt-Hebbel, 2019. "Macroeconomic Institutions: Lessons from World Experience for MENA Countries," Working Papers 1311, Economic Research Forum, revised 21 Aug 2019.

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    More about this item

    Keywords

    Economic growth; financial liberalization; institutions and MENA countries;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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