Capital Account Liberalization Institutions and Economic Growth in the Emerging World

  • Muhammad Atiq-Ur- Rehman Assistant Professor, Punjab Higher Education Department, & Adjunct Faculty COMSATS University, Lahore, Pakistan
  • Furrukh Bashir Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan
  • Salyha Zulfiqar Ali Shah Assistant Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan
  • Muhammad Azhar Bhatti Associate Lecturer, Department of Economics, The Islamia University of Bahawalpur, Pakistan
Keywords: Capital Account, Liberalization, Institutions, Economic Growth, Emerging World

Abstract

Purpose: The relationship between capital account liberalization and economic growth has been a fervently discussed subject among economists and policy-makers. The role of institutions is imperious to comprehensively investigate the impact of financial openness on growth. The objective of the study is to inspect the nexus between financial liberalization and economic growth after incorporating the contribution of institutional quality.

Methodology: A panel of data on 17 emerging market economies (EMEs) is used for the period 1995-2019. We employ the GMM technique by using different de facto and de jure measures of financial liberalization along with institutional variables.

Findings: The empirical results illustrate that better quality institutions strengthen the connection between capital account liberalization and output growth in the emerging World.

Implications: The policymakers should focus on the more beneficial nature of financial liberalization such as FDI. Also, the policy should be aiming at availing the services of efficient human resources with proper institutional infrastructure.

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Published
2021-09-30
How to Cite
Rehman, M. A.-U.-, Bashir, F., Shah, S. Z. A., & Bhatti, M. A. (2021). Capital Account Liberalization Institutions and Economic Growth in the Emerging World. Journal of Accounting and Finance in Emerging Economies, 7(3), 749-756. https://doi.org/10.26710/jafee.v7i3.1984

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