What determines financial development?

Yongfu Huang

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: This paper studies the fundamental determinants of cross-country differences in financial development. Two prominent tools for addressing model uncertainty, Bayesian Model Averaging and Automatic Model Selection using PcGets, are jointly applied to investigate the financial development effects of a wide range of variables taken from various sources. The analysis suggests that the level of financial development in a country is determined by its institutional quality, macroeconomic policies, and geographic characteristics, as well as the level of income and cultural characteristics.

Keywords: Financial development; Model uncertainty; Bayesian Model Averaging; PcGets (search for similar items in EconPapers)
JEL-codes: E44 O16 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2005-12
New Economics Papers: this item is included in nep-cfn, nep-fmk and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:05/580

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