Hatra Voghouei, PhD, Faculty of Economics and Management Universiti Putra Malaysia; M. Azali, Professor, Faculty of Economics and Management, Universiti Putra Malaysia; and Mohammad Ali Jamali, PhD, Faculty of Economics and Management, Universiti Kebangsaan Malaysia.
A survey of the determinants of financial development
Article first published online: 1 NOV 2011
© 2011 The Authors. Journal compilation © 2011 Crawford School of Economics and Government, The Australian National University and Blackwell Publishing Asia Pty Ltd.
Asian-Pacific Economic Literature
Volume 25, Issue 2, pages 1–20, November 2011
How to Cite
Voghouei, H., Azali, M. and Jamali, M. A. (2011), A survey of the determinants of financial development. Asian-Pacific Economic Literature, 25: 1–20. doi: 10.1111/j.1467-8411.2011.01304.x
- Issue published online: 1 NOV 2011
- Article first published online: 1 NOV 2011
The positive effects of financial development on economic growth have encouraged researchers to study the determinants of financial development. Based on the theoretical and empirical studies undertaken, institutions, openness of trade and financial markets, legal tradition, and political economy are identified as factors promoting the financial system. Of these, political economy factors, which can have both direct and indirect effects through other determinants, could be considered the most influential factors in financial development. Variations in the political economy of countries could well explain variations in their financial development. Although all studies show the significant effects of these determinants on financial development, further research is needed to assess the impact of each determinant and the policies that could best promote financial development.