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The purpose of the paper is to review the issues involved in determining the appropriate speed of adjustment and the sequencing of economic reforms, and to develop a checklist of key guidelines for policymakers as a basis for their decision‐making process.

The paper develops a conceptual framework based on a survey of the theoretical and empirical literature, and the practical experience of the authors in this area.

The analysis in the paper shows that the optimal speed and sequence of reforms is country‐specific. But key policy considerations can help guide policymakers in the design of their reform strategy.

The arguments favoring a shock approach or a gradual approach are not absolute. Each country has to choose the proper speed of adjustment and sequencing of reforms by examining country‐specific factors. A thorough case‐by‐case analysis is needed before a decision on the appropriate timing and sequencing of reforms can be made.

The analysis in the paper leads to key reform guidelines for policymakers – covering areas such as prerequisites and resource constraints, political economy considerations, credibility and sustainability of reforms – that are instrumental in developing a well‐sequenced strategy.

This study aims to examine the effect of domestic financial deregulation on economic growth in five selected sub-Saharan African nation (SSA). The paper also explored the interaction effect of domestic financial deregulation and corruption on growth.

The paper used Driscoll and Kraay standard errors based on the pooled ordinary least squares, which is robust to heteroskedasticity, cross-sectional dependence and autocorrelation.

The outcome indicates that domestic financial liberalization has accelerated growth in SSA economies. Similarly, evidence reveals that foreign direct investment and credit to the private sector by banks accelerate growth. However, evidence indicates that labour and capital negate growth. Also, the interaction term for domestic financial liberalization and corruption shows a negative influence on growth. The study, therefore, recommends that well-tailored policy design and strategy be implemented to provide a smooth and conducive business environment for investors.

Numerous studies have analysed the influence of financial deregulation on growth; however, none have examined the effects of domestic financial deregulation on growth in the context of SSA. Also, no studies have explored the interaction effect of domestic financial deregulation and corruption on growth.

The purpose of this paper is to use the recent development in unit root tests and cointegration as applied to panel data and dynamic time series, to estimate the relationship between financial liberalization, financial development and growth.

The paper assesses the dynamics of the relationship between financial development, financial liberalization and growth using the latest dynamic panel data framework and time series analyses comprising up to 15 Sub‐Saharan African countries with annual observations over the period of 1976‐2005. The research uses various measures of, or proxies for, financial intermediary development, including ratio of private sector credit and share of domestic credit to income.

The results obtained from a heterogenous panel investigation and time series methodology such as Granger causality, indicate a long‐run equilibrium relationship between financial development and economic growth. This is consistent with the view that financial development can act as an “engine of growth” and plays a crucial role in the process of economic development. However, there is little evidence to support the hypothesis that financial liberalization directly “leads” growth.

Group mean panel fully modified ordinary least squares (FMOLS) and country‐by‐country time series investigations show evidence of causality running from financial development to growth. The analysis yielded limited evidence of financial liberalization Granger‐causing economic growth. However, this is not to say that financial liberalization does not promote growth, as it could do so indirectly through fostering financial development.

This study aims to examine how property rights, financial liberalization and the control of corruption at the country level influence the inward and outward global engagement of domestic firms from developing countries. The author also examines whether firms with certain resource endowments such as human capital or technological capabilities are better positioned to globalize as the aforementioned institutional factors evolve.

Using a sample of 18,365 firms from 57 developing countries and multilevel modeling, the author shows that institutional factors are related to inward and outward global engagement.

The author finds that firms with human capital are more likely to move outward in the presence of lower levels of corruption. Domestic firms possessing technological capabilities are more likely to engage inward as financial liberalization eases the access to capital.

Many existing studies that have investigated the impact of institutional factors on internationalization by developing country firms have bundled different institutions together therefore sacrificing a focus on the effect of specific institutions on these firm decisions. While the author knows that institutions matter for developing country firm globalization, there is limited research on which institutions matter. There is also a debate on how institutions matter for developing country firms. The study sheds light on these aspects. The author also uses hierarchical linear modelling and uses both country- and firm-level variables.

This paper aims to examine the impact of financial liberalization and foreign Islamic bank entry on the performance of domestic Islamic banks, and credit availability to the private sector.

The authors use the weighted least squares method to estimate four models. These models are suggested by Lee. For this, the inverse of the number of domestic Islamic banks in each period is used to weight the observations in the regressions to correct for varying number of bank observations in each country.

The results indicate that foreign Islamic banks, on average, follow aggressive financing in host countries and enjoy higher net profit margin. Banking sector returns play an important role in the entry decision and presence of foreign banks. Moreover, favorable macro‐economic conditions play a supportive role while higher tax policies play a hostile role for the entry and presence of foreign Islamic banks. The recent financial crisis does not seem to affect the entry decision significantly. But the profitability of domestic Islamic banks has been seriously affected by the recent crisis. Also domestic tax policy and macro‐economic environment play important roles in determining the domestic Islamic bank performance. Results also indicate that private sector credit availability seems to suffer because of higher tax and reserve rate.

The authors' findings suggest that host Islamic economies should strive for an efficient capital market with supportive macro‐economic environment, which in turn helps the local banking sector to develop and benefit from the foreign Islamic bank entry.

This is the first paper to analyze the entry of foreign Islamic banks in the host countries with Islamic banking sector.

Most of the major Islamic countries’ stock exchanges have not been able to perform at the same pace with the major emerging countries’ stock exchanges since the mid of 1990s. The purpose of this paper is to examine the implications of stock market liberalization on cost of capital as one of the crucial driver to stock market development and physical investment growth in emerging Islamic countries.

This study employs static panel data techniques on the sample of seven emerging Islamic countries over the years 1989-2008.

The findings of this study suggest that stock market liberalization significantly reduces cost of capital in the stock markets of sample Islamic countries, which carries policy-oriented implications. Reduction in the cost of capital increases the number of exchange-traded companies, profitability of projects and aggregate investment level; therefore, the study findings are highly concerned by the economic policymakers, corporations and investors alike.

In the literature, different proxies are employed to measure stock market liberalization and cost of capital as well. Due to data limitations, this study could not employ different proxies for both, especially for stock market liberalization, for robustness purpose. That limitation further restricted the coverage of Islamic stock markets and time period. Therefore, generalization of the study results for overall Islamic stock markets can be slightly drawn.

The paper provides further understanding regarding the effects of SML on cost of capital, thereby indirectly on the stock market development, in the context of EIC.

This paper aims to examine the impact of interest rate liberalization on economic growth and the relevance of corruption in the five selected sub-Saharan African countries.

The study used the modified version of Driscoll and Kraay’s model by Hoechle, which solved the effects of cross-sectional dependence and heteroscedasticity.

The findings reveal a positive impact of the index on economic growth, and it was found that foreign direct investment (FDI) and credit to private sector by banks (CPSB) all stimulate economic growth. The interaction terms of corruption with FDI and CPSB indicate negative effects that show how corruption erodes the benefits of liberalization. Finally, the paper recommends the pursuit of appropriate policies with the sole aim of eradicating corruption and providing a conducive environment for business.

The paper developed a composite domestic financial liberalization index to capture the timing and essential dimensions of the reform process. The study investigates the effect of interest rate liberalization on economic growth and the relevance of corruption. Most of the recent and past studies only examined the impact of interest rate reforms on growth without investigating the relevance of corruption.

A controversy about whether liberalization through market opening is a necessary and sufficient condition for a stable and balanced growth in the developing countries was retriggered by the 2008 global financial crisis. This paper aims to analyze 1) the impact of market openness on the economic growth and financial development, 2) the dynamic correlation between the compositional change in foreign investments and the returns of domestic financial markets, 3) the effect of foreign portfolio investment on the stock market activity (liquidity and profitability). Our empirical findings infer that the income level has a positive relationship with financial openness and the foreign portfolio investments cause price fluctuations in the domestic stock market. These results imply that the precautionary and effective policies such as prudential regulations on the short-term capital transactions are strongly needed to emerging markets in order to prevent the excessive fluctuations in the financial markets over the macroeconomic fundamentals.

The purpose of this paper is to empirically assess the effect of the factors contributing to the recovery from this crisis in terms of national GDP growth among the G7, Asian7, and Latin American7 countries.

The author uses a multivariate regression analysis of the determinants of the global financial crisis recovery.

Based on data from 21 developed and developing emerging market economies the author found that good macroeconomic fundamentals together with more open financial policy, financial liberalization, financial depth, domestic performance, and favored global conditions do linearly influence national GDP growth. Over 85 percent of cross-country variations in GDP growth during the recovery phase of the global financial crisis can be explained by its linear dependency on pre-crisis national GDP growth, financial liberalization, financial depth, domestic performance, as well as interaction terms between various explanatory variables. Cross-country differences in national GDP growth also linearly depend on macroprudence and on favorable global conditions.

Results of such empirical examination may enable governments in developing countries devise resilience strategies that may serve as powerful tools for dealing with future global financial crises.

The purpose of this paper is to investigate how trade openness affects the structural vulnerability of developing countries. The analysis is conducted on both the entire sample of 105 countries as well as two sub-samples, namely least developed countries (LDCs) and non-LDCs.

To perform the analysis, the author employs fixed-effects (within) regressions supplemented by instrumental variables technique based on the two-step generalized methods of moments approach.

The author finds empirical evidence that although trade policy liberalization reduces the structural vulnerability on the entire sample developing countries, no statistically significant effect of such liberalization is obtained either on LDCs or non-LDCs. However, trade policy liberalization appears to reduce countries’ exposure to shocks, result that applies to the entire sample as well as the two sub-samples. The author also observes that trade policy liberalization exerts no (statistically) significant effect on the size of shocks that affect developing countries, result that applies to both the full sample and the sub-samples of LDCs and non-LDCs.

In the absence of a well-established theoretical framework on how trade openness affects the structural vulnerability of developing, the author adopts a pragmatic approach by drawing upon many insights of Loayza and Raddatz (2007) who study the structural determinants of external vulnerability.

Developing countries in general and LDCs in particular could address their structural weaknesses by making optimal use of their trade policies. In particular, they could better use the flexibilities available to them in provisions of the World Trade Organization (WTO)’ Agreements. In this respect, the international community, notably donors of the developed world has a key role to play.

This is the first study exploring how trade openness, capturing here through trade policy liberalization affects the structural vulnerability of developing countries.