The impact of financial and trade liberalization on financial development in OPEC member countries

Subject Areas : Agriculture Marketing and Commercialization

Majid  Amirpour Sorkhi ¹ (Department of Economy, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran,)
Shayesteh  Varedi ² (Department of Economy, Qaemshahr Branch, Islamic Azad University, Qaemshahr, Iran)
Kosar  Badiee ³ (Department of Public Administration, Qaemshahr Branch, Islamic Azad University, Qaemshahr, Iran)

Received: 2021-12-12 Accepted : 2022-04-16 Published : 2022-06-01

Keywords: Financial Development, OPEC Member Countries, financial and trade liberalization,

Abstract :

The present study examines the impact of financial and trade liberalization on investment in OPEC member countries. This was descriptive research with a correlational type. The statistical society comprised OPEC member countries. Simple random sampling was used for 14 OPEC member countries. The time interval of 2010-2019 was considered due to heterogeneous published data and consideration of a certain year for all data. The data were derived from World Bank, World Development Indicators (WDI), and Worldwide Governance Indicators (WGI) to be analyzed. Data analysis was done through Eviews software and the generalized method of moments (GMM), and the results indicated the significant impact of trade liberalization on the financial development of selected countries. On the other hand, liberalization affected the financial development of Iran. According to data and statistics, OPEC member countries have relatively poor institutional quality indicators leading to minor impacts of this liberalization compared to other countries with high intuitional quality. It is suggested that the institutional and legal environment of countries be improved in these countries to achieve better and higher impacts of financial and trade liberalization on financial development.

References:

• Abdullahi A. (2019). Impact of financial liberalization on financial market development and economic growth (Case Study: selected developing countries), Fourth National Conference on Management, Accounting, and Economy with emphasis on regional and global marketing, Tehran. https://civilica.com/doc/915448


• Soheyli H. & Shekarbeigi S. (2016). Impacts of auditor career duration and size in investors' perception of audit quality and auditors' fee, Fifth International Conference on Accounting and Management and Second Conference on Open Entrepreneurship and Innovations, Tehran. https://civilica.com/doc/501317


• Khalili Araghi M. & Salimi Shendi R. (2014). The Effect of Fiscal Decentralization on Economic Growth in Various Provinces of Iran (A Spatial Econometric Approach). Journal of Economic Research and Policies, 22(71): 143-156.


• Ahmadi S. (2021). A Study on Effective Factors on Lack of Tendency of Agriculture graduate Students College to Employment and Production in Animal Husbandry Sector. Agricultural Marketing and Commercialization Journal, 5(1): 90-99.


• Mohseni R. (2020). The impacts of trade liberalization on the industrial growth of Iran, Institute for Trade Studies and Research, first edition.


• Sahabi B. & Zolfaghari M. & Alavi S. (2020). Impact of Financial and Trade Openness on Financial Development in Oil and Non-Oil Developing Countries using the Panel ARDL Approach (With Emphasis on Institutional Components). Planning and Budgeting, 24(4): 3-42. http://jpbud.ir/article-1-1772-fa.html


• Abayomi A. & Katz R. & Spence S. & Conton B. & Gevao SM. (2016). Managing Dangerous Pathogens: Challenges in the Wake of the Recent West African Ebola Outbreak. Global Security: Health, Science and Policy, 1(1): 51-57.


• Farid D. & Taheri OA. (2018). Financial liberalization and financial development: evidence from developed countries, Second Conference on Management, Accounting and Industrial Engineering, Tehran. https://civilica.com/doc/811981


• Motameni M. & Kashiri M. (2014). The nexus between financial development, trade liberalization, and economic growth with an emphasis on the underlying role of financial development in trade liberalization and economic growth of Iran, Third National Conference on Accounting, Financial Management, and Investment, Gorgan. https://civilica.com/doc/373112


• Morduch M. & Andrianova S. & Bolton P. & Berglof E. & Demetriades P. & Honohan P. & Laeven L. & Claessens S. & Goodhart Ch. & Davis EPh. & Armendariz B. (2022). Financial development and economic growth: explaining the links, translated by Nahid Poorrostami, Mahmood Mashhadi Ahmad, Tehran University Printing and Publishing Institution.


• Stulz R. (1999). Globalization, Corporate Finance and the cost of Capital. Gournal of Applied Corporate Finance, 12(3): 8-25.


• Karikari JA. (2010). Governance, Financial Liberalization, and Financial Development in Sub-Saharan Africa. African Economic Conference. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1733322


• Santana A. (2020). The relationship between financial development and economic growth in latin american countries: the role of banking crises and financial liberalization. Global Economy Journal, 20(4): 1-26.


• Moyo C. & Le Roux P. (2020). Financial liberalisation, financial development and financial crises in SADC countries. Journal of Financial Economic Policy, 12(4): 477-494. https://doi.org/10.1108/JFEP-07-2018-0102


• Elkhuizen L. & Hermes N. & Jacobs J. & Meesters A. (2018). Financial Development, Financial Liberalization and Social Capital. Applied Economics, 50(11), 1268-1288. https://doi.org/10.1080/00036846.2017.1358446


• Ilker K. & Konstantin L. & Mihail M. (2012). To liberalize or not to liberalize: Political and economic determinants of financial liberalization. Emerging Markets Review, Elsevier, 13(1): 78-99. https://doi.org/10.1016/j.ememar.2011.10.002


• Husseinzadeh H. & Arjmandi Mazrae Y. (2020). Impact of financial liberalization on financial market development and economic growth (Case Study: selected developing countries), Ninth International Conference on Management, Economy, and Development. https://civilica.com/doc/1202611


• Abdullahi DA. (2012). Effects of financial liberalization on financial market development and economic performance of the SSA region: An empirical assessment. Economic Modelling, 30(1): 261-273. https://doi.org/10.1016/j.econmod.2012.09.019


• Asgari M. (2021). Financial liberalization and economic growth: world trend and Iran experience, Institute for Trade Studies and Research, First edition.


• Khoshnevis M. & Ahmadian A. & Mehrabani F. (2010). The nexus between potential and actual indicators of financial liberalization and economic growth in Middle-East countries and North Africa, Journal of Applied Economics, Research Sciences, Islamic Azad University. https://civilica.com/doc/1324666/


• Moradi P. (2017). The Effect of Financial Liberalization on Attracting Foreign Investment in Iran. Journal of Maritime Transport Industry, 3(3): 27-34.


• Blue G. & Marfou M. & Ghahremani A. (2020). The Effect of Accounting Information Quality on the Companies' Cost of Equity, Considering the Role of Information Symmetry and Comparability of Financial Statements. Empirical Studies in Financial Accounting, 17(68): 33-65. https://doi.org/10.22054/qjma.2021.39721.1957


• Arfaee M. & Dehyouri S. & Zand A. (2021). Designing Thermal Map of Organizational Intelligence on Managerial Styles of Managers (Green Space Organization of Tehran). Agricultural Marketing and Commercialization Journal, 5(2): 1-13.