Determinants of Financial Development and their Role Towards Financial Integration

Azeez, Jawad Ahmad

dc.date.accessioned	2020-03-31T09:12:11Z
dc.date.issued	2019-10-17
dc.identifier	doi:10.17170/kobra-202003171082
dc.identifier.uri	http://hdl.handle.net/123456789/11493
dc.language.iso	eng	eng
dc.rights	Urheberrechtlich geschützt
dc.rights.uri	https://rightsstatements.org/page/InC/1.0/
dc.subject	Financial Development	eng
dc.subject	Financial Integration	eng
dc.subject	Islamic Financial development	eng
dc.subject	Islamic Banking	eng
dc.subject.ddc	320
dc.subject.ddc	330
dc.title	Determinants of Financial Development and their Role Towards Financial Integration	eng
dc.type	Dissertation
dcterms.abstract	This thesis is composed of six chapters with four main chapters that encompasses three broad topics – Islamic financial development and economic growth, determinants of financial development, and financial integration. The existing literature mainly focuses on their impact on economic growth or their role towards macroeconomic stability/instability. If financial sector is important, then why do countries have underdeveloped financial markets? In this thesis therefore, we explore a more fundamental question that, what determines financial development and the role of these determinants towards financial integration? The second Chapter as a first step, establishes the link between financial development and economic growth. In that context we took two distinct sections of the financial market to see their impact on economic growth. These two sections include the Islamic financial market and the conventional financial market. Therefore, in this chapter we, (i) explore the effect of Islamic finance on growth, which has not been explored as extensively as for conventional finance. (ii) investigate the role of Islamic finance on economic growth, that will enable policy makers to formulate policies towards the Islamic financial market and its regulation. Our results show the supply-leading hypothesis to be valid between Islamic finance and economic growth. For the case of conventional finance, the majority of the results also validates the supply-leading hypothesis. The outcomes for Islamic finance do not change even in the presence of conventional finance. Similar results were found for the time series study on Pakistan which was included in Chapter 3. Being an important player among the countries undergoing transformation, growth and increased usage of Islamic banking, our choice for Pakistan was eminent. After establishing the link between financial sector and growth, we then turn in Chapter 4 towards the determinants of financial development. We extract many possible factors from the theory and test the effect of these factors on improving financial sector development. We also test the Rajan & Zingales (2003) simultaneous hypothesis, which is then extended to include institutions. The panel data is divided into three groups – low income, middle- income and upper middle-income countries. Our results show that the determinants affect the financial sector development heterogeneously across income groups. For the lower middle-income countries we do not find evidence for a positive effect of the determinants. Beginning from the middle-income group, the determinants start to positively affect financial sector development. The Rajan and Zingales hypothesis is partially established for lower middle-income group in its strict version. A loose version of the hypothesis for the upper-middle income countries was also verified. The result indirectly points out to the threshold literature. The determinants of financial development also suggested to improve financial integration. In Chapter 5, we explore the factors that may help to improve financial integration. We took a similar approach of dividing the countries into three groups and tested the effectiveness of the proposed determinants on the de-jure measure of financial integration. Our initial results verify that the effect is not homogeneous across income groups. Therefore, in the next step we tested the same determinants in quantile regression environment. Our results, like Chapter 4, favor indirectly the threshold condition according to which the factors seem to improve financial integration only at higher levels.	eng
dcterms.accessRights	open access
dcterms.creator	Azeez, Jawad Ahmad
dcterms.dateAccepted	2020-02-04
dcterms.extent	xv, 214 Seiten
dc.contributor.corporatename	Kassel, Universität Kassel, Fachbereich Wirtschaftswissenschaften
dc.contributor.referee	Wangenheim, Georg von (Prof. Dr.)
dc.contributor.referee	Klein, Christian (Prof. Dr.)
dc.subject.swd	Finanzwirtschaft	ger
dc.subject.swd	Entwicklung	ger
dc.subject.swd	Integration	ger
dc.subject.swd	Islamische Bank	ger
dc.type.version	publishedVersion
ubks.embargo.terms	2021-03-31
ubks.embargo.end	2021-03-31
kup.iskup	false