Financial Development, Trade Openness and Economic Growth in CLV Countries
This paper examines the relationship between financial development, trade openness, and economic growth using the ARDL approach for Cambodia-Laos-Vietnam. CLV also has comparative advantages in attracting more foreign direct investments in the agriculture and industry sectors. Currently, the number of banks and financial institutions in these countries has been increasing in terms of quality and quantity, which play a vital service role in the financial sector in the countries' economies. The ratio between the money supply as a component of GDP is rising, and the volume of trade in each country tends to also increase despite the effects of the global financial crisis. However, the increase of such a level of financial development and trade openness is still not having a positive effect regarding economic growth, except in some countries. For example, in Cambodia, long-term financial development impacts real income per capita. However, in Laos, the openness of trade has a relationship with real income per capita or the growth of the economy in both the short-run and long-run. The reason for this is that fundamental and economic structures in each country are different