Does Financial Openness Lead to Deeper Domestic Financial Markets?

Calderón, César; Kubota, Megumi

dc.creator	Calderón, César
dc.creator	Kubota, Megumi
dc.date	2012-03-19T19:11:08Z
dc.date	2012-03-19T19:11:08Z
dc.date	2009-06-01
dc.date.accessioned	2023-02-17T21:10:25Z
dc.date.available	2023-02-17T21:10:25Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090619153305
dc.identifier	http://hdl.handle.net/10986/4166
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/245203
dc.description	Advanced and emerging market economies have rapidly integrated into international capital markets and this growing globalization of financial markets has led to some important changes in the patterns of saving and investment across the world. The main goal of this paper is to test whether the cross-border asset trade has led to improvements in the intermediation of these savings -- that is, foster development of domestic financial markets. The authors have collected annual information on financial market development, financial openness, and other control variables for a sample of 145 countries for the period 1974-2007. Controlling for the likely endogeneity of financial openness, the analysis finds that rising financial openness expands private credit, bank assets, and stock market and private bond market development, and generates efficiency gains in the banking system. However, the impact of financial openness on domestic financial development may depend on the level of institutional quality, the extent of investor protection, and the degree of trade openness. In general, rising financial openness will enlarge the size and activity of financial intermediaries, improve efficiency in the banking system, and contribute to deepen private bond markets in countries with moderate to high levels of institutional quality and investor protection as well as in countries with high trade openness.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 4973
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTING
dc.subject	ACCOUNTING STANDARDS
dc.subject	ACCUMULATION OF DEBT
dc.subject	ADVANCED COUNTRIES
dc.subject	ADVERSE SELECTION
dc.subject	AGENCY PROBLEMS
dc.subject	ASSET HOLDINGS
dc.subject	BAILOUT
dc.subject	BALANCE SHEETS
dc.subject	BANK ASSETS
dc.subject	BANK CREDIT
dc.subject	BANK CREDITS
dc.subject	BANK DEPOSIT
dc.subject	BANK DEPOSITS
dc.subject	BANK LOANS
dc.subject	BANK POLICY
dc.subject	BANKING CRISIS
dc.subject	BANKING SECTOR
dc.subject	BANKING SYSTEM
dc.subject	BANKING SYSTEMS
dc.subject	BOND MARKET
dc.subject	BOND MARKET CAPITALIZATION
dc.subject	BOND MARKET DEVELOPMENT
dc.subject	BOND MARKETS
dc.subject	BONDS
dc.subject	BOOM-BUST CYCLES
dc.subject	BUREAUCRATIC QUALITY
dc.subject	CAPITAL ACCOUNT
dc.subject	CAPITAL ACCOUNTS
dc.subject	CAPITAL FLOW
dc.subject	CAPITAL FLOWS
dc.subject	CAPITAL INFLOWS
dc.subject	CAPITAL MARKET
dc.subject	CAPITAL MARKET LIBERALIZATION
dc.subject	CAPITAL REQUIREMENTS
dc.subject	CAPITAL STRUCTURE
dc.subject	CENTRAL BANK
dc.subject	CENTRAL BANKS
dc.subject	CIVIL CODE
dc.subject	COMMERCIAL BANK
dc.subject	COMMERCIAL BANKING
dc.subject	COMMERCIAL BANKS
dc.subject	COMMON LAW
dc.subject	CONSUMER PRICE INDEX
dc.subject	CONTRACT ENFORCEMENT
dc.subject	COST OF CAPITAL
dc.subject	COUNTRY RISK
dc.subject	CREDITOR
dc.subject	CREDITORS
dc.subject	CURRENCY
dc.subject	CURRENCY CRISIS
dc.subject	DEBT
dc.subject	DEFAULT RATES
dc.subject	DEPOSIT
dc.subject	DEPOSIT INSURANCE
dc.subject	DEPOSIT MONEY BANKS
dc.subject	DEPOSITS
dc.subject	DERIVATIVES
dc.subject	DEVELOPING COUNTRIES
dc.subject	DOMESTIC BANKING
dc.subject	DOMESTIC BANKING MARKETS
dc.subject	DOMESTIC BOND
dc.subject	DOMESTIC BOND MARKETS
dc.subject	DOMESTIC CAPITAL
dc.subject	DOMESTIC CAPITAL MARKETS
dc.subject	DOMESTIC CREDIT
dc.subject	DOMESTIC CURRENCY
dc.subject	DOMESTIC DEBT SECURITIES
dc.subject	DOMESTIC ECONOMY
dc.subject	DOMESTIC FINANCIAL MARKET
dc.subject	DOMESTIC FINANCIAL MARKETS
dc.subject	DOMESTIC MARKET
dc.subject	DUMMY VARIABLES
dc.subject	EMERGING ECONOMIES
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET ECONOMIES
dc.subject	EMERGING MARKET FIRMS
dc.subject	EMERGING MARKETS
dc.subject	ENFORCEMENT MECHANISMS
dc.subject	EQUITY MARKETS
dc.subject	EXCHANGE RATE
dc.subject	EXCHANGE RATES
dc.subject	EXTERNAL ASSET
dc.subject	EXTERNAL ASSETS
dc.subject	EXTERNAL FINANCE
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FEDERAL RESERVE SYSTEM
dc.subject	FINANCIAL ASSETS
dc.subject	FINANCIAL CONTRACTS
dc.subject	FINANCIAL CRISES
dc.subject	FINANCIAL DEREGULATION
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL FLOWS
dc.subject	FINANCIAL INFRASTRUCTURE
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INTERMEDIARIES
dc.subject	FINANCIAL LIBERALIZATION
dc.subject	FINANCIAL MARKET
dc.subject	FINANCIAL MARKET DEVELOPMENT
dc.subject	FINANCIAL OPENNESS
dc.subject	FINANCIAL SECTOR
dc.subject	FINANCIAL SECTOR DEVELOPMENT
dc.subject	FINANCIAL SERVICES
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCIAL SYSTEMS
dc.subject	FOREIGN ASSET
dc.subject	FOREIGN BANKS
dc.subject	FOREIGN DIRECT INVESTMENT
dc.subject	GLOBAL ECONOMY
dc.subject	GLOBALIZATION
dc.subject	GROWTH RATES
dc.subject	INCOME LEVEL
dc.subject	INCOME LEVELS
dc.subject	INDUSTRIAL COUNTRIES
dc.subject	INFLATION
dc.subject	INFLATION RATE
dc.subject	INFLATION RATES
dc.subject	INFORMATION ASYMMETRY
dc.subject	INFORMATION DISCLOSURE
dc.subject	INSTITUTIONAL DEVELOPMENT
dc.subject	INSTRUMENT
dc.subject	INSURANCE COMPANIES
dc.subject	INSURANCE PENETRATION
dc.subject	INTEREST RATE
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL CAPITAL
dc.subject	INTERNATIONAL CAPITAL MARKETS
dc.subject	INTERNATIONAL ECONOMICS
dc.subject	INTERNATIONAL FINANCE
dc.subject	INTERNATIONAL FINANCIAL INTEGRATION
dc.subject	INTERNATIONAL FINANCIAL MARKETS
dc.subject	INTERNATIONAL FINANCIAL STATISTICS
dc.subject	INTERNATIONAL INVESTMENT
dc.subject	INTERNATIONAL MARKETS
dc.subject	INTERNATIONAL TRADE
dc.subject	INVESTOR PROTECTION
dc.subject	LIABILITY
dc.subject	LIFE INSURANCE
dc.subject	LIFE INSURANCE CONTRACTS
dc.subject	LIFE INSURANCE PREMIUM
dc.subject	LINES OF CREDIT
dc.subject	LIQUIDITY
dc.subject	LIQUIDITY PROBLEMS
dc.subject	LOAN
dc.subject	LOCAL CURRENCY
dc.subject	LOCAL DEBT
dc.subject	LOCAL DEBT MARKETS
dc.subject	LOCAL FINANCIAL MARKETS
dc.subject	LOCAL MARKETS
dc.subject	LOCAL STOCK MARKET
dc.subject	LOCAL STOCK MARKETS
dc.subject	MACROECONOMIC STABILITY
dc.subject	MARKET DATA
dc.subject	MARKET DEPTH
dc.subject	MARKET DEVELOPMENT
dc.subject	MARKET TURNOVER
dc.subject	MARKET VALUE
dc.subject	MINORITY SHAREHOLDER
dc.subject	MINORITY SHAREHOLDER PROTECTIONS
dc.subject	MONETARY FUND
dc.subject	MORAL HAZARD
dc.subject	NATIONAL STOCK EXCHANGES
dc.subject	NON-PERFORMING LOANS
dc.subject	OPEN ECONOMIES
dc.subject	OVERHEAD COSTS
dc.subject	POLITICAL ECONOMY
dc.subject	POLITICAL RISK
dc.subject	POOL OF FUNDS
dc.subject	PORTFOLIO
dc.subject	POSITIVE COEFFICIENT
dc.subject	PRIVATE BOND
dc.subject	PRIVATE CREDIT
dc.subject	PRIVATE DOMESTIC DEBT
dc.subject	PRIVATE PROPERTY
dc.subject	PROPERTY RIGHTS
dc.subject	PROTECTION OF INVESTORS
dc.subject	PUBLIC MARKET
dc.subject	REAL EXCHANGE RATE
dc.subject	REGULATORY FRAMEWORK
dc.subject	REMITTANCES
dc.subject	RESERVE
dc.subject	RESERVES
dc.subject	RISKY ASSETS
dc.subject	RULE OF LAW
dc.subject	SAVINGS
dc.subject	SHARE OF ASSETS
dc.subject	SHARE OF EQUITY
dc.subject	SHAREHOLDER
dc.subject	SHAREHOLDER RIGHTS
dc.subject	SHAREHOLDERS
dc.subject	STOCK EXCHANGE
dc.subject	STOCK MARKET
dc.subject	STOCK MARKET BUBBLES
dc.subject	STOCK MARKET CAPITALIZATION
dc.subject	STOCK MARKET DEVELOPMENT
dc.subject	STOCK MARKET DEVELOPMENTS
dc.subject	STOCK MARKETS
dc.subject	STOCKS
dc.subject	TRADE LIBERALIZATION
dc.subject	TRADING
dc.subject	TRANSPARENCY
dc.subject	VOLATILE CAPITAL
dc.subject	WORLD FINANCIAL MARKETS
dc.title	Does Financial Openness Lead to Deeper Domestic Financial Markets?
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region