Essays on international finance and macroeconomics

• Autores: Zeynep Ozkok
• Directores de la Tesis: Klaus Desmet (dir. tes.)
• Lectura: En la Universidad Carlos III de Madrid ( España ) en 2013
• Idioma: inglés
• Tribunal Calificador de la Tesis: Philip Vermeulen (presid.), Ricardo Mora Villarrubia (secret.), Rosario Crinò (voc.)
• Materias:
  • Ciencias económicas
    • Teoría económica
      • Estudios de desarrollo económico
    • Economía internacional
• Enlaces
  • Tesis en acceso abierto en: e-Archivo
• Resumen

  • The recent years have shown an increasing number of inter-linkages across countries. This surely is a result of what is called the integration phenomenon. Looking at the financial side, stock and bond markets have become more intertwined across countries leading to a simplification of trade in securities and goods. Banking sectors across borders on the other hand have come to be more unified, allowing countries to increase the number of operations further boosting trade and helping promote domestic growth and development. To this end my dissertation has studied the recent phenomenon of financial integration and its effect on economic growth and financial development. Moreover it examined the impact of the most recent measures taken at the European level that are established to promote greater integration and harmonization. The first chapter of the dissertation, “Financial Openness and Financial Development: An Analysis Using Indices” studies the link between financial openness and financial development through panel data analysis on advanced and emerging market countries. Using indices, financial openness together with institutional, educational and macroeconomic variables is shown to explain a large part of the variation in financial development across countries and over time. The analysis demonstrates that different indexing strategies could serve in finding better measures in terms of significances for financial openness and financial development in comparison to the individual indicators used in the literature. Principal component type financial openness index conveys a positive effect on financial development independent from the lag structure chosen, time dummies and trends used. The second chapter of the dissertation, “Financial Harmonization and Industrial Growth: Evidence from Europe” analyzes the growth effects of the Financial Services Action Plan (FSAP) of the European Commission, a set of measures and directives that aim to harmonize European financial markets. Using a panel of 25 countries and 30 industries, the standard specification predicts harmonization to lower growth, though the negative effect is mitigated for industries that depend more on external finance. This seemingly surprising result however occurs as a result of omitted variable bias. As in any policy implementation, early adopters are more likely to bear higher costs and experience less of the benefits of harmonization. Controlling for the relative timing of adoption, harmonization is then shown to have a positive effect on growth. This finding is robust to including further controls, splitting up the sample into different groups of countries, and extending the model to a dynamic setting. The third and the last chapter of the dissertation, “Financial Harmonization and Financial Development: An Application of Europe’s Financial Services Action Plan” examines the Financial Services Action Plan (FSAP) of the European Commission which intends to create an open, secure, integrated financial market across EU member countries. Although recent research has shown a positive impact of the FSAP directives on cross-border lending and industrial growth the effect on financial development remains to be examined. Using principal component analysis to construct financial, banking sector, bond and stock market development indices, this paper investigates the impact of financial harmonization policies of the FSAP on financial development in a panel of twenty five EU member states for the period of 1996 – 2007. Taking into account the timing perspective in implementing the FSAP directives across countries financial harmonization is found to positively affect financial development. The results are shown to be robust to different approaches in constructing the harmonization index and the harmonization difference (relative timing of adoption) variable, adding further controls, and extending the analysis to include the data for the recent period.