英语论文网

(Yanikkaya, 2003) argues that trade openness has a significant impact on the GDP share. In developing countries, trade openness creates new opportunities to increase the growth process and hence the unemployment level decrease. (Jin, 2000) states that trade openness facilitates in establishing the development process. Moreover, local technology and production process can be improved through trade liberalization.

One school of thoughts is of view that the financial liberalization is also a major contributor towards the financial development in developing countries. “Financial liberalization means the deregulation of domestic financial markets and liberalization of the capital account.” (Attaullah, Cockerill, & Le, 2004) empirically shows that the effectiveness of banking sector is improved following the financial liberalization. (Bekaert, Harvey, & Lundblad, 2005) Suggests that there is a significant relationship between financial liberalization and economic growth. However, (Stiglitz, 2000) argues that increase in financial liberalization enhances the macro economic vulnerability of nations and chances of crises becomes significant. The study of (Gong, Lee, & Chen, 2004) supported the fact that increase in financial liberalization can cause crisis. (Wyplosz, 2001) suggested that financial liberalization is effective if the objective is to increase the competition and decrease the monopoly powers. However, financial liberalization is quite risky for developing countries. Many developing countries in Asia and Europe have grown faster even with strong financial restraints.

MODEL SPECIFICATION

Based on the above literature, we can propose that in Pakistan, banking sector development is a function of real Gross Domestic Products (RGDP), Discount date (DR) and Trade openness (TO) and Financial Liberalization (FL). This can also be shown as

BSD Pak = f (RGDP, RI, TO, FL)

Where, BSD Pak = Banking Sector Development of Pakistan

In this study, we have used following models which are estimated by using least square techniques. In model 1, we will use Liquid liabilities as the indicator of banking sector development. In model 2, Private Sector Credit will be used as the indicator of banking sector development where as in model 3, domestic credit will be used as the indicator of banking sector development. (Yu & Gan, 2010)

ln LL= βo+β1ln RGDP+ β2 DR + β3TO+ β4FL + e

ln PRI= βo+ β1ln RGDP+ β2 DR + β3 TO+ β4FL+ e

ln DC= βo+β1ln RGDP+ β2 DR + β3 TO+ β4FL+ e

where,

ln LL= Natural logarithm of liquid liabilities

ln PRI= Natural logarithm of Private sector Credit

ln DC= Natural logarithm of Domestic Credit

Data source:

We have used annual data from 1970 to 2007 in this study. The data is obtained from the World Bank database and international financial statistics. However, Financial Liberalization Index of Pakistan, constructed by (Waliullah, 2010) is used in this study. Real GDP (RGDP) is calculated by using following formula

EMPIR本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。