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Author: V.R.Prabhakaran Nair
Publisher:
ISBN:
Category :
Languages : en
Pages : 25
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Book Description
The main objective of a shift from a controlled regime to a more liberal regime in the financial sector was to promote investment in the economy. The studies on the determinants of private investment in developing countries, against the traditional theories of investment, focussed on the role of government policy and tried to derive an explicit relationship between the principal policy instruments and private investment. Recent theoretical and empirical studies have produced results consistent with the idea that the economic policy of a nation is crucial in determining the domestic investment behaviour. These studies emphasised the role of financial sector development on private investment, and provide a framework for understanding the effects of changes in economic policies on private investment. In the present paper we study the determinants of manufacturing investment in the light of financial sector liberalization introduced in 1991. The results indicate that traditional determinants like output, profit etc still play a major role in determining investment than financial sector liberalization. Though the domestic financial liberalisation produced an environment conducive for investment, it could not succeeded in creating a sustained increase in capital formation in the post reform period. In other words, firms consider the demand factor, internal liquidity position and past investment decisions etc as the major indicators for future investment.
Author: V.R.Prabhakaran Nair
Publisher:
ISBN:
Category :
Languages : en
Pages : 25
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Book Description
The main objective of a shift from a controlled regime to a more liberal regime in the financial sector was to promote investment in the economy. The studies on the determinants of private investment in developing countries, against the traditional theories of investment, focussed on the role of government policy and tried to derive an explicit relationship between the principal policy instruments and private investment. Recent theoretical and empirical studies have produced results consistent with the idea that the economic policy of a nation is crucial in determining the domestic investment behaviour. These studies emphasised the role of financial sector development on private investment, and provide a framework for understanding the effects of changes in economic policies on private investment. In the present paper we study the determinants of manufacturing investment in the light of financial sector liberalization introduced in 1991. The results indicate that traditional determinants like output, profit etc still play a major role in determining investment than financial sector liberalization. Though the domestic financial liberalisation produced an environment conducive for investment, it could not succeeded in creating a sustained increase in capital formation in the post reform period. In other words, firms consider the demand factor, internal liquidity position and past investment decisions etc as the major indicators for future investment.
Author: Y. Huang
Publisher: Springer
ISBN: 0230302491
Category : Business & Economics
Languages : en
Pages : 233
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Book Description
A PDF version of this book is available for free in open access via the OAPEN Library platform, www.oapen.org. This book examines the emergence of both financial markets and carbon markets, and provides an in-depth investigation on the fundamental determinants of financial development.
Author: Matias Braun
Publisher: World Bank Publications
ISBN:
Category : Finance
Languages : en
Pages : 47
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Book Description
"A well developed financial system enhances competition in the industrial sector by allowing easier entry. The impact varies across industries, however. For some, small changes in financial development quickly induce entry and dissipate incumbents' rents, generating strong incentives to oppose improvement of the financial system. In other sectors incumbents may even benefit from increased availability of external funds. The relative strength of promoters and opponents determines the political equilibrium level of financial system development. This may be perturbed by the effect of trade liberalization in the strength of each group. Using a sample of 41 trade liberalizers Braun and Raddatz conduct an event study and show that the change in the strength of promoters vis--̉vis opponents is a very good predictor of subsequent financial development. The result is not driven by changes in demand for external funds, or by the success of the trade policy. The relationship is mediated by policy reforms, the kind that induces competition in the financial sector, in particular. Real effects follow not so much from capital deepening but mainly through improved allocation. The effect is stronger in countries with high levels of governance, suggesting that incumbents resort to this costly but more subtle way of restricting entry where it is difficult to obtain more blatant forms of anti-competitive measures from politicians. This paper--a product of the Investment and Growth Team, Development Research Group--is part of a larger effort in the group to understand the relation between finance and the macroeconomy"--World Bank web site.
Author: Luiz Fernando de Paula
Publisher: Taylor & Francis
ISBN: 1136854908
Category : Business & Economics
Languages : en
Pages : 273
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Book Description
Since the beginning of the 1990s, Brazil has followed a pattern of economic development inspired by Washington Consensus. This framework includes a set of liberalising and market friendly policies such as privatisation, trade liberalization, stimulus to foreign direct investment, tax reform, and social security reforms. This book assesses the determinants and impacts of financial liberalisation in Brazil considering its two dimensions: the opening up of the balance of payments capital account, and the penetration by foreign bank of the domestic banking sector. The author combines theoretical and empirical analyses. Some make use of mathematical models and/or statistical techniques; however, they are only used when they are strictly necessary to the analysis.
Author: Mr.Bart Turtelboom
Publisher: International Monetary Fund
ISBN: 1451939183
Category : Business & Economics
Languages : en
Pages : 46
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Book Description
This paper undertakes a survey of theoretical considerations and an analysis of the experience of five African countries with interest rate liberalization. Despite substantial progress in monetary policy reforms, liberalization has only partially affected the level and variability of interest rates. Several factors—macroeconomic instability, oligopolistic financial markets, the absence of developed capital markets, as well as the sequencing of the liberalization programs and the asymmetric availability of information—explain the increase in the spread between lending and deposit rates as well as the rather inflexible pattern of interest rates during the transition to a market-based financial system.
Author: Nauro F. Campos
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 46
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Book Description
This paper investigates the role of structural reforms -financial reforms, trade liberalization, and privatization- as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.
Author: Carmen M. Reinhart
Publisher: Johns Hopkins University Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 476
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Book Description
Which comes first, saving or growth? Does financial liberalization help or hinder saving? How do terms of trade shocks affect saving? This book looks beyond the traditional determinants of saving.--Publisher's description.
Author: Ram Niwas Agarwal
Publisher:
ISBN:
Category : Developing countries
Languages : en
Pages : 62
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Book Description
Author: Mr.Pablo Emilio Guidotti
Publisher: International Monetary Fund
ISBN: 1451852452
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
This paper examines the empirical relationship between long–run growth and the degree of financial development, proxied by the ratio of bank credit to the private sector as a fraction of GDP. We find that this proxy enters significantly and with a positive sign in growth regressions on a large cross–country sample, but with a negative sign using panel data for Latin America. Our findings suggest that the main channel of transmission from financial development to growth is the efficiency of investment, rather than its volume. We also present a model where the negative correlation between financial intermediation and growth results from financial liberalization in a poor regulatory environment.
Author: Mr.R. B. Johnston
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
This paper analyzes the different channels through which financial variables and financial sector reform can affect economic growth and efficiency, using panel data for 40 countries which reformed their financial systems. Financial sector reform is hypothesized to affect economic growth and efficiency through three main channels: the real interest rate representing the interest cost of capital, the volume of intermediation, and financial sector efficiency. The results indicate that financial reforms have structural effects; that financial variables and reforms are important determinants of economic performance; that the impact depends on whether countries did or did not face a financial crisis; and that the “quality” of financial sector reform matters.
