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Vietnam and threshold conditions in the process of global financial integration

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Issue Date
2015
Author
Nguyen Thi Ngoc Trang
Co-Author
Nguyen Thi Diem Kieu
Host Item
Journal of Economic Development
ISSN
1859 -1124
Metadata

Show full item record


Issue Date
2015
Author
Nguyen Thi Ngoc Trang
Co-Author
Nguyen Thi Diem Kieu
Metadata

Show full item record

Metadata Views

25

Content Views

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Abstract

The global financial crisis, once again, has ignited several intense debates over financial globalization merits, particularly for developing countries. There are probably a number of initial threshold conditions to be attained before substantial benefits may be reaped, and the risks of capital account liberalization, minimized. This article takes into account a series of empirical framework typifying these threshold conditions, estimating essential ones and accordingly proposing a few policy implications. Empirical evidence demonstrates that there exist specific thresholds in such variables with significant effects on the nexus between financial integration and growth, including those as clearly identifiable as financial depth and institutional quality. It is also shown by the findings that Vietnam’s financial development has preliminarily satisfied the necessary conditions for efficient financial integration. In contrast, the institutional quality threshold remains far distant.

Keywords
Threshold conditions, Financial integration, Financial development, Growth, Institution, Capital account liberalization
URI
http://digital.lib.ueh.edu.vn/handle/UEH/55224
http://jabes.ueh.edu.vn/Home/SearchArticle?article_Id=34ae728f-c9e9-4742-a0e6-264dc1c4f821
Publisher
Trường Đại học Kinh tế Tp. Hồ Chí Minh
DOI
http://doi.org/10.24311/jed/2015.22.4.03
Reference
Acemoglu, D., Johnson, S., Robinson, J. A., &Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms:Volatility, crises, and growth. Journalof Monetary Economics,50(1),49–123.

Aghion, P., & Banerjee, A. (2005). Volatility and growth: Clarendon lectures ineconomics. Oxford: Oxford University Press.

Aghion, P.,Bacchetta, P., Rancière, R., & Rogoff, R. (2009). Exchange rate volatility and productivity growth: Therole offinancial development. Journal ofMonetary Economics,56(4), 494–513.

Arellano,M., & Bond, S. (1991). Some tests of specification for panel data: MonteCarlo evidence and an application to employment equations. Review ofEconomic Studies, 58, 277–297.

Bekaert,G., Harvey, C. R., & Lundblad, C. (2005). Does financial liberalizationspur growth? Journal of FinancialEconomics, 77(1), 3–55.

Blundell,R., & Bond, S. (1998). Initial conditions and moment restrictions indynamic panel data models. Journal of Econometrics, 87, 115–143.

Calvo, G., Izquierdo, A.,& Mejia, L.-F. (2004). On theempirics of sudden stops: The relevance of balance-sheet effects (FederalReserve Bank of San Francisco Proceedings).

Chanda, A. (2005). The influence of capital controlson long run growth: Where and how much? Journalof Development Economics, 77(2),441–466.

Chang, R., Kaltani, L., & Loayza, N. V. (2009).Openness can be good for growth: The role of policy complementarities. Journal of Development Economics,90(1), 33–49.

Chinn, M. D.,& Ito, H. (2008). A new measure of financial openness.Journal of Comparative Policy Analysis,10(3), 309–322.

Frankel, J., & Cavallo, E. A. (2008). Doesopenness to trade make countries more vulnerable to sudden stops or less? Usinggravity to establish causality. Journalof International Money and Finance, 27,1430–1452.

Klein, M. W. (2005). Capital account liberalization, institutional quality, and economicgrowth: Theory and evidence (Working PaperNo. 11112). Cambridge, MA: NBER.

Kose, M. A., Prasad, E. S., Rogoff, K., & Wei,S.-J. (2009). Financial globalization: A reappraisal. IMF Staff Papers, 56(1),8–62.

Kose, M. A., Prasad, E. S., & Taylor, A. D.,(2011). Thresholds in the process of international financial integration. Journal of International Money and Finance,30(1), 147–179.

Kraay,A. (1998). In search of the macroeconomiceffects of capital account liberalization. (Unpublished). Washington, D.C:The World Bank Group.

Lane, P. R., & Milesi-Ferretti, G. M., (2007). Theexternal wealth of nations Mark II: Revised and extended estimates of foreignassets and liabilities, 1970–2004. Journalof International Economics, 73(2), 223–250.

Mishkin, F. S. (2006). The next great globalization: How disadvantaged nations can harnesstheir financial systems to get rich. Princeton, NJ: Princeton UniversityPress.

Obstfeld, M., & Rogoff, K. (1995). The mirage offixed exchange rates. Journal ofEconomic Perspectives, 9(4), 73–96.

Quinn, D. P., & Toyoda, A. M. (2008). Does capitalaccount liberalization lead to growth? Reviewof financial studies, 21(3),1403–1449.

Roodman, D. (2006). Howto do xtabond2: An introduction to “Difference” and “System” GMM in Stata (WorkingPaper No. 103). Washington, DC: Center for Global Development.

Wei, S.-J.(2001). Domestic crony capitalism and international fickle capital: Is there aconnection? International Finance, 4(1),15–46.

Acemoglu, D., Johnson, S., Robinson, J. A., &Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms:Volatility, crises, and growth. Journalof Monetary Economics,50(1),49–123.

Aghion, P., & Banerjee, A. (2005). Volatility and growth: Clarendon lectures ineconomics. Oxford: Oxford University Press.

Aghion, P.,Bacchetta, P., Rancière, R., & Rogoff, R. (2009). Exchange rate volatility and productivity growth: Therole offinancial development. Journal ofMonetary Economics,56(4), 494–513.

Arellano,M., & Bond, S. (1991). Some tests of specification for panel data: MonteCarlo evidence and an a...
See More
Appears in Collections:JABES in English

There are no files associated with this item.



Vietnam and threshold conditions in the process of global financial integration

TweetLikeShare# Shares: 0

Metadata Views

25

Content Views

0

Issue Date
2015
Author
Nguyen Thi Ngoc Trang
Co-Author
Nguyen Thi Diem Kieu
Host Item
Journal of Economic Development
ISSN
1859 -1124
Metadata

Show full item record


Issue Date
2015
Author
Nguyen Thi Ngoc Trang
Co-Author
Nguyen Thi Diem Kieu
Metadata

Show full item record

Metadata Views

25

Content Views

0

Abstract

The global financial crisis, once again, has ignited several intense debates over financial globalization merits, particularly for developing countries. There are probably a number of initial threshold conditions to be attained before substantial benefits may be reaped, and the risks of capital account liberalization, minimized. This article takes into account a series of empirical framework typifying these threshold conditions, estimating essential ones and accordingly proposing a few policy implications. Empirical evidence demonstrates that there exist specific thresholds in such variables with significant effects on the nexus between financial integration and growth, including those as clearly identifiable as financial depth and institutional quality. It is also shown by the findings that Vietnam’s financial development has preliminarily satisfied the necessary conditions for efficient financial integration. In contrast, the institutional quality threshold remains far distant.

Keywords
Threshold conditions, Financial integration, Financial development, Growth, Institution, Capital account liberalization
URI
http://digital.lib.ueh.edu.vn/handle/UEH/55224
http://jabes.ueh.edu.vn/Home/SearchArticle?article_Id=34ae728f-c9e9-4742-a0e6-264dc1c4f821
Publisher
Trường Đại học Kinh tế Tp. Hồ Chí Minh
DOI
http://doi.org/10.24311/jed/2015.22.4.03
Reference
Acemoglu, D., Johnson, S., Robinson, J. A., &Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms:Volatility, crises, and growth. Journalof Monetary Economics,50(1),49–123.

Aghion, P., & Banerjee, A. (2005). Volatility and growth: Clarendon lectures ineconomics. Oxford: Oxford University Press.

Aghion, P.,Bacchetta, P., Rancière, R., & Rogoff, R. (2009). Exchange rate volatility and productivity growth: Therole offinancial development. Journal ofMonetary Economics,56(4), 494–513.

Arellano,M., & Bond, S. (1991). Some tests of specification for panel data: MonteCarlo evidence and an application to employment equations. Review ofEconomic Studies, 58, 277–297.

Bekaert,G., Harvey, C. R., & Lundblad, C. (2005). Does financial liberalizationspur growth? Journal of FinancialEconomics, 77(1), 3–55.

Blundell,R., & Bond, S. (1998). Initial conditions and moment restrictions indynamic panel data models. Journal of Econometrics, 87, 115–143.

Calvo, G., Izquierdo, A.,& Mejia, L.-F. (2004). On theempirics of sudden stops: The relevance of balance-sheet effects (FederalReserve Bank of San Francisco Proceedings).

Chanda, A. (2005). The influence of capital controlson long run growth: Where and how much? Journalof Development Economics, 77(2),441–466.

Chang, R., Kaltani, L., & Loayza, N. V. (2009).Openness can be good for growth: The role of policy complementarities. Journal of Development Economics,90(1), 33–49.

Chinn, M. D.,& Ito, H. (2008). A new measure of financial openness.Journal of Comparative Policy Analysis,10(3), 309–322.

Frankel, J., & Cavallo, E. A. (2008). Doesopenness to trade make countries more vulnerable to sudden stops or less? Usinggravity to establish causality. Journalof International Money and Finance, 27,1430–1452.

Klein, M. W. (2005). Capital account liberalization, institutional quality, and economicgrowth: Theory and evidence (Working PaperNo. 11112). Cambridge, MA: NBER.

Kose, M. A., Prasad, E. S., Rogoff, K., & Wei,S.-J. (2009). Financial globalization: A reappraisal. IMF Staff Papers, 56(1),8–62.

Kose, M. A., Prasad, E. S., & Taylor, A. D.,(2011). Thresholds in the process of international financial integration. Journal of International Money and Finance,30(1), 147–179.

Kraay,A. (1998). In search of the macroeconomiceffects of capital account liberalization. (Unpublished). Washington, D.C:The World Bank Group.

Lane, P. R., & Milesi-Ferretti, G. M., (2007). Theexternal wealth of nations Mark II: Revised and extended estimates of foreignassets and liabilities, 1970–2004. Journalof International Economics, 73(2), 223–250.

Mishkin, F. S. (2006). The next great globalization: How disadvantaged nations can harnesstheir financial systems to get rich. Princeton, NJ: Princeton UniversityPress.

Obstfeld, M., & Rogoff, K. (1995). The mirage offixed exchange rates. Journal ofEconomic Perspectives, 9(4), 73–96.

Quinn, D. P., & Toyoda, A. M. (2008). Does capitalaccount liberalization lead to growth? Reviewof financial studies, 21(3),1403–1449.

Roodman, D. (2006). Howto do xtabond2: An introduction to “Difference” and “System” GMM in Stata (WorkingPaper No. 103). Washington, DC: Center for Global Development.

Wei, S.-J.(2001). Domestic crony capitalism and international fickle capital: Is there aconnection? International Finance, 4(1),15–46.

Acemoglu, D., Johnson, S., Robinson, J. A., &Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms:Volatility, crises, and growth. Journalof Monetary Economics,50(1),49–123.

Aghion, P., & Banerjee, A. (2005). Volatility and growth: Clarendon lectures ineconomics. Oxford: Oxford University Press.

Aghion, P.,Bacchetta, P., Rancière, R., & Rogoff, R. (2009). Exchange rate volatility and productivity growth: Therole offinancial development. Journal ofMonetary Economics,56(4), 494–513.

Arellano,M., & Bond, S. (1991). Some tests of specification for panel data: MonteCarlo evidence and an a...
See More
Appears in Collections:JABES in English

There are no files associated with this item.



Citation

APA    Trang, N. T. N. (2015). Vietnam and threshold conditions in the process of global financial integration. (Journal Article). http://digital.lib.ueh.edu.vn/handle/UEH/55224
   
MLA    Nguyen Thi Ngoc Trang. Vietnam and threshold conditions in the process of global financial integration. 2015. Trường Đại học Kinh tế Tp. Hồ Chí Minh. Journal Article. http://digital.lib.ueh.edu.vn/handle/UEH/55224
   
Chicago    Nguyen Thi Ngoc Trang. "Vietnam and threshold conditions in the process of global financial integration. "(Journal Article, Trường Đại học Kinh tế Tp. Hồ Chí Minh, 2015)
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