Financial Markets in Developing Countries
: The Role of Financial Integration and Globalization

  • Ngoc Chau Do

Student thesis: Master typesSpecialised Master in International and Development Economics


In this thesis, I would like to investigate the role of financial sector development measures by de factor measurements including (i) Private sector credit, (ii) private sector credit by banks and (iii) stock market capitalization (% of GDP) on the growth of economic outcome. As mentioned above about the different characteristics of countries, country – specific variables represent the macroeconomics situations of countries including trade openness, inflation and government expenditures are also added to find the answers for the following questions:
◦ 1, Does financial market development promote economic growth in developing countries?
The main findings I found after conducting the work is that there exist an inversed U shaped relationship of all three main explanatory variables on the growth rate of GDP per capita. The promoting effect of financial development on growth in low middle income countries are higher than that in low income countries. This thesis also tries to find the thresholds from which more does not mean better for the economy. The pre and post financial crisis is also included to see if the relationship between financial development and economic growth is affected by crisis and how it is.
As in the context of integration and globalization occurring everywhere, the role of financial integration on economic growth under the level of financial development of developing countries is also mentioned and considered in this thesis. As from the stylized facts about developing countries above, FDI inflows is among the main sources of capital flows in developing countries, this proxy is used to illustrates the financial integration to explain the second question:
◦ 2, Does financial integration promote economic growth in developing countries? If so, is this relationship impacted by the level of financial development?
Date of Award1 Aug 2020
Original languageEnglish
Awarding Institution
  • University of Namur
SupervisorYULIYA RYCHALOVSKA (Supervisor) & Stephanie Weynants (Co-Supervisor)


  • Financial development
  • Financial integration
  • Economic Growth
  • Developing Countries

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