Financial Development, Openness and Institutions: Evidence from Panel Data

Using dynamic panel data techniques and several data sets, we provide new evidence on the effects of openness and institutions on financial development. Our findings suggest that openness and institutions are potentially very important factors for different aspects of financial development. They do not however provide much support to the simultaneous openness hypothesis of Rajan and Zingales (2003), suggesting that a more nuanced openness or political economy story may be required to explain the variation of financial development across countries and over tim