This paper is an attempt to test the openness hypothesis for the case of Pakistan. Being a developing country and having different interest groups interfering in the financial market, openness hypothesis provides a theory that provides a win-win situation for the interest groups, consequently improving financial development. We presented a political economy approach of analyzing the state of Pakistans financial market and proposed an openness hypothesis. Our result indicates that individually, trade and financial opening are beneficial for improving the financial market development however, the simultaneous opening of financial and trade hypothesis does not hold for Pakistan. In other words, the simultaneous opening of financial and trade accounts does not seem to be a necessary condition for improving the financial sector.
Keywords : Financial Development, Openness hypothesis, Political economy, Regression analysis, Financial Liberalization, Trade openness.
Authored by :
(1) Jawad Ahmad
Research Associate, University of Kassel, Hessen, Germany.
(2) Sania Zehraa
Research Scholar, International Islamic University, Islamabad, Pakistan.
(3) Noor Jehan
Assistant Professor,Department of Economics,Abdul Wali Khan University, Mardan, KP, Pakistan.
Global Political Review (GPR) is an emerging elite scholarly journal which deals broadly with theoretical and practical aspects of regional and global issues. It discusses the sub-national, national, regional and global crucial and attention-seeking topics of Political Science, International Relations, Peace and Conflict Studies, Defense and Strategic Studies, Diplomatic Studies, International Law, UNO, other Inter-governmental Organizations, Non-Governmental Organizations and International Political Economy. The following details show an overall scope of the journal.
