Financial Liberalization or Financial Development? Tests Using Delphi-Based Index Ofliberalization

Authors

  • Nicolaas Gronewold University of Western Australia, Australia
  • Jiangang Peng Hunan University, China
  • Guanzheng Li Hunan University, China
  • Xiangmei Fan Hunan Normal University, China

DOI:

https://doi.org/10.32890/ijbf2009.6.1.6

Keywords:

financial liberalisation, financial development, economic growth

Abstract

Most empirical analysis of the finance-growth nexus has used measures of financial development such as the ratio or monetary of financial assets to GDP to measure financial development. We argue that from a policy perspective measures of financial liberalisation or reform are of greater interest and, besides, are less likely to be beset by endogeneity problems which have dogged the empirical growth literature. We develop such a measure by combining the ‘Delphi’ method and principal components analysis to construct an index of financial liberalisation for China. Much of China’s financial development has been policy-driven and we could expect to find a distinct difference, at least in timing, between measures of financial reform and financial development. We compare our financial liberalisation index to a number of standard measures of financial development and find that there is pervasive evidence that financial liberalisation Granger-causes financial development but not vice versa.

 

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Published

17-03-2009

Issue

Vol. 6 No. 1 (2009): International Journal of Banking and Finance (IJBF) Vol. 6, No.1, 2009

Section

Articles

How to Cite

Gronewold, N., Peng, J., Li, G., & Fan, X. (2009). Financial Liberalization or Financial Development? Tests Using Delphi-Based Index Ofliberalization. International Journal of Banking and Finance, 6(1), 95-115. https://doi.org/10.32890/ijbf2009.6.1.6

Research impact

Harvested 2026-09-07
1 citations, from OpenAlex — the highest of the sources checked

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Identifiers DOI 10.32890/ijbf2009.6.1.6 OpenAlex W1507273118