Abstract
References
- Antzoulatos, A. A., Panopoulou, E., and Tsoumas, C. (2011). Do Financial Systems Converge?. Review of International Economics, 19(1), 122-136.
- Apergis, N., Christou, C., and Miller, S. (2012). Convergence Patterns in Financial Development: Evidence from Club Convergence. Empirical Economics, 43(3), 1011-1040. Bahadir, B., and Valev, N. (2015). Financial Development Convergence. Journal of Banking & Finance, 56, 61-71.
- Becker, R. , Enders , W., and Lee, J. (2006). A Stationarity Test in the Presence of an Unknown Number of Smooth Breaks. J. Time Ser. Anal. 27, 381–409.
- Bianco, M., Gerali, A., and Massaro, R. (1997). Financial systems across “developed economies”: convergence or path dependence?. Research in Economics, 51(3), 303-331.
- Bruno, G., De Bonis, R., and Silvestrini, A. (2012). Do Financial Systems Converge? New Evidence from Financial Assets in OECD Countries. Journal of Comparative Economics, 40(1), 141-155.
- Çaglar, A. E., and Kubar, Y. (2017). Does financial development support energy consumption?. Süleyman Demirel University Journal of Social Sciences Institute, (27), 96-121.
- Çoban, S., and Topçu, M. (2013). The nexus Between Financials Development And Energy Consumption in The EU: A Dynamic Panel Data Analysis. Energy Economics, 39, 81-88.
- Dekle, R., and Pundit, M. (2016). The Recent Convergence of Financial Development in Asia. Emerging Markets Finance and Trade, 52(5), 1106-1120
- Enders, W. and Lee, J. (2012b). The Flexible Fourier form and Dickey -Fuller Type unit Root Tests. Economics Letters, 117, 196-199.
- Fung, M. K. (2009). Financial Development and Economic Growth: Convergence or Divergence?. Journal of International Money and Finance, 28(1), 56-67.
- Gallizo, J. L., Saladrigues, R., and Salvador, M. (2010). Financial Convergence in Transition Economies: EU Enlargement. Emerging Markets Finance and Trade, 46(3), 95-114.
- Hadri, K. and Kurozumi, E. (2011). A Locally Optimal Test for No Unit Root in Cross-Sectionally Dependent Panel Data. Hitotsubashi J. Econ. 52 (2), 165–184.
- Hadri, K., Kurozumi, E. (2012). A Simple Panel Stationarity Test in the Presence of Serial Correlation and A Common Factor. Econ. Let. 115, 31–34.
- Kılınç, D., Seven, Ü., and Yetkiner, H. (2017). Financial Development Convergence: New Evidence for the EU. Central Bank Review, 17(2), 47-54.
- Kırca, M., and Canbay, Ş. (2020). Kırılgan Beşli Ülkeler İçin Phillips Eğrisi Analizi. İktisadi İdari ve Siyasal Araştırmalar Dergisi, 5(12), 130-140.
- Lee, C. , Wu , JL, and Yang , L. (2016). A Simple Panel Unit Root Test with Smooth Breaks in the Presence of a Multifactor Error Structure. Oxford Bulletin of Economics and Statistics, 78 (3), 365-393.
- Murinde, V., Agung, J., and Mullineux, A. (2004). Patterns of Corporate Financing and Financial System Convergence in Europe. Review of International Economics, 12(4), 693-705.
- Nazlioglu, S., and Karul, C. (2017). A Panel Stationarity Test With Gradual Structural Shifts: Re-Investigate The International Commodity Price Shocks. Economics Modeling, 61, 181-192.
- Özek, Y. and Ergür, H. O. (2020). Kırılgan Beşli Ülkelerinde Finansal Yakınsamanın Birim Kök Testleri Ile Analizi. Kesit Akademi Dergisi, 6(23): 237-245
- Sadorsky, P. (2011). Financial Development and Energy Consumption in Central and Eastern European Frontier Economies. Energy Policy. 999-1006.
- Sigeze, Ç., Coşkun, N., and Ballı, E. (2019). Investigation of Unemployment Hysteria In EU Countries And Turkey By Fourier-KPSS Unit Root Test. Izmir Journal of Economics, 34(1), 15-24.
- Stolbov, M., and Veysov , A. (2011). Do financial systems converge? A Comprehensive Panel Data Approach and New Evidence from a Dataset for 102 Countries. Available at SSRN: https://ssrn.com/abstract¼2037395.
- Uğur, A. and Bingöl, N. (2021). Finansal Yakınsama Olgusu: Türkiye İle G7 Ülkeleri Arasında Finansal Yakınsamanın Analizi. Adıyaman Üniversitesi Sosyal Bilimler Enstitüsü Dergisi , (37) , 125-157. DOI: 10.14520/adyusbd.686612
- Zeren, F., and Koç, M. (2014). The Nexus between Energy Consumption and Financials Development with Asymmetrical Causality Test: New Evidence from Newly Industrialized Countries. International Journal of Energy Economics and Policy, 4(1), 83-91.
Financial Convergence Test with Fourier Panel KPSS Stationarity Test: Findings from Fragile Five Countries
Abstract
Financial development is an important component of economic development. In particular, it is very important for developing countries to converge to developed countries in terms of financial development level. In this study, the convergence of the financial development indicators of the Fragile Five Countries to the average of the indicators of the four selected countries (USA, England, Australia and Japan) in the top ten in terms of financial development level for the period 1980-2020 is tested. In addition, stochastic convergence based on relative financial indicator figures, that is, convergence to the mean, is also investigated. The data used in the study were accessed from the World Bank official database. Stationarity test which is introduced to the literature by Nazlıoğlu and Karul (2017) based on the Fourier stationarity test developed first by Becker et al. (2006). This test allows for gradual structural changes and cross-section dependence and cross-section heterogeneity. As in all stationarity tests, the basic hypothesis of this test is that the series is stationary, while the alternative hypothesis claims that it contains a unit root. This test gives results for both the individual and the panel as a whole. As a result of the tests, it is seen that the financial development indicators of the Fragile Five Countries do not converge to the selected country group and its average.
Keywords
Financial Development Liquid Liabilities Private Loan Deposit Bank Assets Fourier Panel Stationarity Convergence.
References
- Antzoulatos, A. A., Panopoulou, E., and Tsoumas, C. (2011). Do Financial Systems Converge?. Review of International Economics, 19(1), 122-136.
- Apergis, N., Christou, C., and Miller, S. (2012). Convergence Patterns in Financial Development: Evidence from Club Convergence. Empirical Economics, 43(3), 1011-1040. Bahadir, B., and Valev, N. (2015). Financial Development Convergence. Journal of Banking & Finance, 56, 61-71.
- Becker, R. , Enders , W., and Lee, J. (2006). A Stationarity Test in the Presence of an Unknown Number of Smooth Breaks. J. Time Ser. Anal. 27, 381–409.
- Bianco, M., Gerali, A., and Massaro, R. (1997). Financial systems across “developed economies”: convergence or path dependence?. Research in Economics, 51(3), 303-331.
- Bruno, G., De Bonis, R., and Silvestrini, A. (2012). Do Financial Systems Converge? New Evidence from Financial Assets in OECD Countries. Journal of Comparative Economics, 40(1), 141-155.
- Çaglar, A. E., and Kubar, Y. (2017). Does financial development support energy consumption?. Süleyman Demirel University Journal of Social Sciences Institute, (27), 96-121.
- Çoban, S., and Topçu, M. (2013). The nexus Between Financials Development And Energy Consumption in The EU: A Dynamic Panel Data Analysis. Energy Economics, 39, 81-88.
- Dekle, R., and Pundit, M. (2016). The Recent Convergence of Financial Development in Asia. Emerging Markets Finance and Trade, 52(5), 1106-1120
- Enders, W. and Lee, J. (2012b). The Flexible Fourier form and Dickey -Fuller Type unit Root Tests. Economics Letters, 117, 196-199.
- Fung, M. K. (2009). Financial Development and Economic Growth: Convergence or Divergence?. Journal of International Money and Finance, 28(1), 56-67.
- Gallizo, J. L., Saladrigues, R., and Salvador, M. (2010). Financial Convergence in Transition Economies: EU Enlargement. Emerging Markets Finance and Trade, 46(3), 95-114.
- Hadri, K. and Kurozumi, E. (2011). A Locally Optimal Test for No Unit Root in Cross-Sectionally Dependent Panel Data. Hitotsubashi J. Econ. 52 (2), 165–184.
- Hadri, K., Kurozumi, E. (2012). A Simple Panel Stationarity Test in the Presence of Serial Correlation and A Common Factor. Econ. Let. 115, 31–34.
- Kılınç, D., Seven, Ü., and Yetkiner, H. (2017). Financial Development Convergence: New Evidence for the EU. Central Bank Review, 17(2), 47-54.
- Kırca, M., and Canbay, Ş. (2020). Kırılgan Beşli Ülkeler İçin Phillips Eğrisi Analizi. İktisadi İdari ve Siyasal Araştırmalar Dergisi, 5(12), 130-140.
- Lee, C. , Wu , JL, and Yang , L. (2016). A Simple Panel Unit Root Test with Smooth Breaks in the Presence of a Multifactor Error Structure. Oxford Bulletin of Economics and Statistics, 78 (3), 365-393.
- Murinde, V., Agung, J., and Mullineux, A. (2004). Patterns of Corporate Financing and Financial System Convergence in Europe. Review of International Economics, 12(4), 693-705.
- Nazlioglu, S., and Karul, C. (2017). A Panel Stationarity Test With Gradual Structural Shifts: Re-Investigate The International Commodity Price Shocks. Economics Modeling, 61, 181-192.
- Özek, Y. and Ergür, H. O. (2020). Kırılgan Beşli Ülkelerinde Finansal Yakınsamanın Birim Kök Testleri Ile Analizi. Kesit Akademi Dergisi, 6(23): 237-245
- Sadorsky, P. (2011). Financial Development and Energy Consumption in Central and Eastern European Frontier Economies. Energy Policy. 999-1006.
- Sigeze, Ç., Coşkun, N., and Ballı, E. (2019). Investigation of Unemployment Hysteria In EU Countries And Turkey By Fourier-KPSS Unit Root Test. Izmir Journal of Economics, 34(1), 15-24.
- Stolbov, M., and Veysov , A. (2011). Do financial systems converge? A Comprehensive Panel Data Approach and New Evidence from a Dataset for 102 Countries. Available at SSRN: https://ssrn.com/abstract¼2037395.
- Uğur, A. and Bingöl, N. (2021). Finansal Yakınsama Olgusu: Türkiye İle G7 Ülkeleri Arasında Finansal Yakınsamanın Analizi. Adıyaman Üniversitesi Sosyal Bilimler Enstitüsü Dergisi , (37) , 125-157. DOI: 10.14520/adyusbd.686612
- Zeren, F., and Koç, M. (2014). The Nexus between Energy Consumption and Financials Development with Asymmetrical Causality Test: New Evidence from Newly Industrialized Countries. International Journal of Energy Economics and Policy, 4(1), 83-91.
Details
| Primary Language | English |
|---|---|
| Journal Section | Articles |
| Authors | |
| Publication Date | January 25, 2023 |
| Published in Issue | Year 2023 Volume: 7 Issue: 1 |
