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The purpose of this paper is to examine if the simultaneous openness to trade and capital account can promote financial sector development.

Based on a sample of 12 Arab countries over the period from 1985 to 2011, the data were analyzed using the dynamic and static panel data analysis. In particular, the authors apply three estimate techniques: the generalized method of moments, fixed effects and random effects.

The empirical results do not support the simultaneous openness hypothesis. Even trade and financial openness have an important separate role in enhancing financial sector development; their interaction effect is harmful. This empirical evidence indicates that opening Arab countries to both trade and capital account will not necessarily promote financial sector development.

Some Arab countries are not included in the study sample because of the lack of data.

The main implication of this study is: opening Arab countries for trade and capital account at the same time will not improve the development of financial sector.

The paper examines one of the most important issues in developing countries; where, the people want to know if the country openness to trade and finance will generate a social and economic welfare for them.

This study can be considered as one of the rare studies that examine the simultaneous openness issue in the developing countries. It recommends regulators and policy makers to take gradual steps toward adopting trade and financial openness in the Arab countries.

The purpose of this paper is to assess the impact of trade and financial sector openness and their simultaneous openness on financial development of South Asia.

To serve the purpose, a panel data set of four South Asian economies, namely, India, Pakistan, Sri Lanka and Bangladesh, was constituted for the period spanning from 1996 to 2015. Along with the conventional panel unit root test and co-integration test, pooled mean group estimations were used to formulate the empirical findings.

The findings suggested a significant negative impact of financial openness and significant positive impact of trade openness on the financial development of South Asia. The empirical evidence did not support simultaneous openness of trade and financial sector for the studied region.

The study contributes to the existing literature by analyzing the effect of trade and financial openness on financial development of South Asia. The study provides substantial evidence to the stakeholders for formulating policies that can boost financial development of the region.

The greatest challenge facing most economies today is how to grow their economies and reduce over-dependence on imports in the midst of increasing integration of world economies. Addressing this challenge seems to be difficult despite all efforts by policymakers at different times to salvage the situation, the problem persists as evident in the global financial crisis of 2008 and the Eurozone crisis of 2012 which were generally viewed as a glaring illustration of limitless pursuit of economic integration and governance failure at the expense of carefulness, prudence, due diligence, and regulation. It also reflects the lack of proper coordination and lack of proper economic integration facing most emerging market economies of the world. Against this background, this study focuses on the reexamination of the impact of trade openness (TOP) and financial openness (FOP) on economic growth in emerging market economies. The direct and interaction effect of the both openness variables on economic growth in these markets is investigated using data from 2000 to 2017 adopted from World Development indicators of the World Bank. Over 30 emerging market economies covering Asia, Latin America, and Europe are included in the study. For empirical analysis, the study uses one measure of FOP: de facto (total capital flow) variables following Aizenman and Noy (2009) and a measure of TOP as total trade–GDP ratio. The study applies the Dynamic Panel Approach, that is, the Arellano–Bond GMM estimation technique and Granger Causality Test to address the objectives. The results of this study show that TOP has a positive and significant impact on all the countries studied, whereas FOP has positive but no significant impact on economic growth of these countries, implying that these countries have not harnessed the benefit of financial liberalization and integration. It is recommended that the emerging market economies should open not only their economies to trade but also open their economies to finance so as to reap the benefits of FOP and integration.

For a new technology-based firm, the ability to learn is crucial to their growth process. However, firms constantly face the challenge of maintaining the ambidexterity of two different learning activities, namely learning by exploiting existing competencies and learning through exploring new ones. The purpose of this study is to examine how small technology-based firms at incubators perform both activities. Using the index of network openness, we argue that firms perform ambidexterity by maintaining a balance between a high and low level of network openness. Our first hypothesis was constructed as firms pursuing explorative learning will develop a high level of network openness while those pursuing exploitative learning will develop a low level of network openness. In the second hypothesis, we argue that firms need to balance network openness. Developing too low level of network openness will not add more benefits as the cost for maintaining relationship increases. Similarly, developing too high level of openness may potentially hinder firms’ progress as firms face distractions and difficulties in maintaining a wide variety of relationships. Using the empirical data from new technology-based firms located at the Daresbury SIC, we confirm the hypotheses. The result also found a trend of a curvilinear relationship between network openness and the firms’ performance which confirm the second hypothesis. The overall findings have illustrated how a network has a positive impact on helping small and new technology-based firms perform learning ambidexterity.

This study investigates (1) the effect of foreign direct investment (FDI) on total factor productivity (TFP) and economic growth dynamics and (2) the relevance of value added from three economic sectors in modulating the established effect of FDI on TFP and economic growth dynamics.

The geographical and temporal scopes are respectively 25 Sub-Saharan African countries and the period 1980–2014. The empirical evidence is based on non-interactive and interactive generalised method of moments.

The following main findings are established. First, FDI has a positive effect on gross domestic product (GDP) growth, GDP per capita and welfare real TFP. Second, the effect of FDI is negative on real GDP and TFP while the impact is insignificant on real TFP growth and welfare TFP. Third, values added to the three economic sectors largely modulate FDI to produce negative net effects on TFP and growth dynamics.

Policy implications are discussed with particular emphasis on the need to complement added value across various economic sectors in order to leverage on the benefits of FDI in TFP and economic growth.

To the best of the authors’ knowledge, this is the first study to assess how value added from various economic sectors affect the relevance of FDI on macroeconomic outcomes.

This chapter deals with the estimation of the effect of exchange rate flexibility on financial account openness. The purpose of our analysis is twofold: On the one hand, we try to quantify the differences in the estimated parameters when exchange rate flexibility is treated as an exogenous regressor. On the other hand, we try to identify how two different degrees of exchange rate flexibility (intermediate vs floating regimes) affect the propensity of opening the financial account. We argue that a simultaneous determination of exchange rate and financial account policies must be acknowledged in order to obtain reliable estimates of their interaction and determinants. Using a panel data set of advanced countries and emerging markets, a trivariate probit model is estimated via a maximum simulated likelihood approach. In line with the monetary policy trilemma, our results show that countries switching from an intermediate regime to a floating arrangement are more likely to remove capital controls. In addition, the estimated coefficients exhibit important differences when exchange rate flexibility is treated as an exogenous regressor relative to the case when it is treated as endogenous.

The purpose of this paper is to examine the impact of trade openness on the cost of financial intermediation and bank performance. Developed and developing countries are currently pursuing trade openness to achieve higher bank performance with less intermediation costs.

In attaining the study's objectives, several regression methodologies were employed (i.e. system generalized method of moments (GMM), fixed effect, pooled ordinary least squares (OLS) and vector error correction model (VECM)). The authors tested the hypothesis on data of 885 banks from BRICS countries, which span 18 years (2000–2017).

The results from this robust study showed that embedding higher trade openness reduces financial intermediation costs and improves banks' performance. The results remain robust following the use of different estimation methods and alternative variables as proxies. In addition, results were still valid upon considering bank level, industry level and country level as control variables. It was also observed that the relation pattern holds its rigidity during “good” and “bad” times (i.e. the global financial crisis).

The results provide better references for bank regulators, academics and policymakers to take advantage of the low financial intermediation costs resulting from trade openness.

This paper aims to reexamine the relationship between financial openness and financial development in Ghana.

The study applied maximum likelihood estimation and autoregressive distributed lag approach and tested Granger causality using quarterly data from 1990:1 to 2020:4.

This study revealed a long-run equilibrium relationship between financial openness and development, indicating that financial openness is a critical factor in Ghana’s financial development. Therefore, the study recommends with caution that policies aimed at promoting financial openness could be an effective way to encourage sustainable financial development in Ghana, as financial openness alone may not bring the desired outcome.

The study contributes to the existing body of knowledge by providing empirical evidence of the link between financial openness and financial sector development in Ghana. Future research could delve deeper into the mechanisms through which financial openness affects financial development, exploring potential channels and transmission mechanisms.

The findings suggest that policymakers, particularly the Ministry of Finance and the Bank of Ghana, should prioritize policies aimed at promoting financial openness. This includes continued efforts toward financial liberalization and creating an environment conducive to domestic and international financial transactions. Moreover, policies aimed at increasing trade openness, boosting real GDP and maintaining moderate real interest rates are essential for fostering financial sector development.

Enhancing financial sector development can have significant implications for society, including increased access to financial services, improved economic opportunities and enhanced overall economic stability. By promoting financial openness and development, policymakers would contribute to poverty reduction, job creation and overall socio-economic development. The study bridges the gap between theory and practice by providing empirical evidence supporting the theoretical proposition that financial openness stimulates financial sector development.

This study fills a crucial gap in the literature on the effects of financial openness on Ghana’s financial sector development. It focuses on Ghana, which liberalized its financial sector in 1988 as part of the overall economic reforms in 1983, and this justifies the starting point of this paper in 1990, as there are no adequate data before 1990. The study uses principal component analysis to construct an index that measures financial development. The study considers the recent financial crises in Ghana in 2017 and underscores the importance of understanding the link between financial openness and financial development, which becomes useful for policymakers and researchers studying financial system development in sub-Saharan Africa which includes Ghana.

This study examines the long-term and causal relationship among foreign direct investment (FDI) inflows, trade openness and economic growth from India.

This study has used annual time series data from the period 1985–2018 and applied the Johansen cointegration and vector autoregression (VAR) model.

The results of Johansen's cointegration confirm no long-term relationship among all the above three variables. Further, the results of VAR Granger causality indicate that FDI causes economic growth and economic growth causes FDI, which confirms the bi-directional causality. In contrast, this study found that there is no bi-directional causality between trade openness and economic growth.

Through this study, the government could take the decisions related to foreign investment after adopting more trade openness because the study results revealed that if India follows more trade openness, then how FDI will flow (upward and downward). With impulse analysis, researchers, government and policymakers take the decision-related FDI inflows for the forthcoming ten years after 2018.

This study has found the most exciting results from the impulse functions of FDI inflows, trade openness and economic growth, which showed the situation of these three variables as increase and decrease in the forthcoming ten years.