Abstract
Abstract. In order to overcome the troubles of the crisis in the seventies, North African countries have adopted financial liberalization policies to enhance their economic growth. Moreover, these policies have affected the stability of their banking systems. The purpose of this study is to test the impact of financial liberalization on the probability of appearance of banking crises which covers a sample of four countries of the North Africa region during the period 1970-2003 by using a panel logit model. The empirical analysis of this study suggests that (a) the degree of financial liberalization impact significantly the occurrence of banking crises in the countries of the region, (b) the order of financial liberalization between internal and external financial liberalization is also crucial for the emergence of banking crises.
Keywords. Financial liberalization, Banking crises, North African countries, Panel logit model, Order of financial liberalization, Degree of financial liberalization.
JEL. F36, G18, F37, G15, C33.References
Bandiera, O., Caprio, G., Honohan, P., Schiantarelli, F., (2000). Does financial reform raise or reduce saving. Review of Economics and Statistics, 82(2), 239-263. doi. 10.1162/003465300558768
Bekaert, G., Harvey, C.R., & Lundblad, C. (2001). Emerging equity markets and economic development. Journal of Development Economics. 66(2). 465-504. doi. 10.3386/w7763
Boyer, R., Dehove, M., & Plihon, D. (2004). Les crises financières. La documentation Française, Paris.
Caprio, G., & Klingebiel, D. (1996). Bank insolvencies: Cross-country experience. World Bank Policy Research Working Paper. No.1620. [Retrieved from].
Demirguc-Kunt, A., & Detragiache, E. (1998). Financial liberalization and financial fragility. IMF Working Paper, No.83. doi. 10.5089/9781451850512.001
Demirgüç-Kunt, A., & Detragiache, E. (2000). Does deposit insurance increase banking system stability? Journal of Monetary Economics. 49(7), doi. 10.1596/1813-9450-2247
Dornbusch, R. (2001). A primer on emerging market crises. NBER Working Paper Series, No.8326. doi. 10.3386/w8326
Edwards, S. (1984). The order of liberalization of the external sector in developing countries. Princeton Essays in International Finance. No.156. Princeton. [Retrieved from].
Eichengreen, B., (2000). The EMS crisis in retrospect. NBER Working Paper, No.8035. doi. 10.3386/w8035
Eichengreen, B., & Leblang, D. (2003). Capital account liberalization and growth: Was Mr. Mahathir Right? International Journal of Finance and Economics, 8(3), 205-224. doi. 10.3386/w9427
Galbis,V. (1977). Financial intermediation and economic growth in less‐developed countries: A theoretical approach. Journal of Development Studies, 13(2), 58-72. doi. 10.1080/00220387708421622
Gamra, S.B., & Plihon, D. (2007). Politiques de libéralisation financière et crises bancaires. Économie internationale. 112(1), 5-28.
Glick, R., & Hutchison, M. (1999). Banking and currency crises: How common are twins? Pacific Basin Working Paper Series. Working Paper, No.PB99-07. doi. 10.2139/ssrn.288723
Harvey, C.R., & Lundblad, C.T. (2003). Equity market liberalization in emerging markets. Journal of Financial Research. 26(3), 275-299. doi. 10.1111/1475-6803.00059
Jbili, A., Enders, K., & Treichel, V. (1997). Financial sector reforms in Morocco and Tunisia. Financeand Development. 29-31. doi. 10.1177/0972652714534025
Johnston, R., (1997). Identifying the critical determinants of service quality in retail banking: importance and effect. International Journal of Bank Marketing. 15(4), 111-116. doi. 10.1108/02652329710189366
Kaminsky, G.L., & Schmukler, S.L. (2002). Emerging market instability: Do sovereign ratings affect country risk and stock returns?. The World Bank Economic Review, 16(2), 171-195. doi. 10.1093/wber/16.2.171
Kaminsky, G., & Reinhart, C. (1999). The twin crises: The causes of banking and balance of payments problems. American Economic Review, 89(3), doi. 10.1257/aer.89.3.473
Kapur, B. (1976). Alternative stabilization policies for less-developed economies. Journal of Political Economy, 84(4), 777-795. doi. 10.1086/260476
Levine, R., & King, R. (1993). Finance and growth: Schumpeter might be right. The Quarterly Journal of Economics. 108(3), 717-737. doi. 10.2307/2118406
Mathieson, D.J., & Rojas-Suarez, L. (1993). Liberalization of the capital account: Experiences and issues. IMF Occasional Paper, No.103. doi. 10.5089/9781451973754.001
McKinnon, R.I. (1973). Money and Capital in Economic Development. The Brookings Institution. Washington. D.C.
Mehrez, G., & Kaufmann, D. (2000). Transparency, liberalization and banking crises. World BankWorking Paper. [Retrieved from].
Williamson, J., & Mahar, M. (1998). A survey of financial liberalization. Essays in International Finance. No.211. Princeton. [Retrieved from].