Abstract
This article investigates the impact of financial liberalization on aggregate productivity growth. Based on a sample of the EU accession countries and using quarterly longitudinal panel data between 1995 and 2007, the static robust and dynamic panel data estimates indicate clear evidence of a link between the long-run growth and a number of indicators of financial liberalization. The empirical results illustrate that financial liberalization is negatively related to economic growth significantly. The results imply that higher levels of post-EU-membership growth are not caused by liberalized financial markets.
Notes
1 See Figure 3 in Reinhart and Rogoff (Citation2008) for the link between banking crises and high capital mobility.