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<p>This study seeks to empirically explore whether the regulatory quality in the NMS-10 impacts deepening international financial integration and whether the strengthening of regulatory quality for NMS-10 has a causal effect on the level of international financial integration (IFI) in NMS-10. The study covers NMS-10 between 1995 and 2020. The estimation of parameters was made with descriptive statistics, the Breusch-Pagan test, the Pesaran test, the Granger causality test, and OLS regression to analyze the impact of REQ on IFI. The findings of the study reveal that regulatory quality has a statistically significant effect in deepening the process of financial integration for both periods, in the pre-accession and post-accession EU process. In addition, the results demonstrate that the regulatory quality of NMS-10 provides sound laws and policies that support the business environment, encourage cross-bordering financial transactions. Moreover, the results of the Granger causality test show that the level of global financial integration is causally impacted by the improvement in NMS-10 regulatory quality. This indicates that regulatory effectiveness might predicts international financial integration.</p>
</abstract>

This study seeks to empirically explore whether the regulatory quality in the NMS-10 impacts deepening international financial integration and whether the strengthening of regulatory quality for NMS-10 has a causal effect on the level of international financial integration (IFI) in NMS-10. The study covers NMS-10 between 1995 and 2020. The estimation of parameters was made with descriptive statistics, the Breusch-Pagan test, the Pesaran test, the Granger causality test, and OLS regression to analyze the impact of REQ on IFI. The findings of the study reveal that regulatory quality has a statistically significant effect in deepening the process of financial integration for both periods, in the pre-accession and post-accession EU process. In addition, the results demonstrate that the regulatory quality of NMS-10 provides sound laws and policies that support the business environment, encourage cross-bordering financial transactions. Moreover, the results of the Granger causality test show that the level of global financial integration is causally impacted by the improvement in NMS-10 regulatory quality. This indicates that regulatory effectiveness might predicts international financial integration.

The impact of regulatory quality on deepens level of financial integration: Evidence from the European Union countries (NMS-10)

ECONOMICS

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

This study seeks to empirically explore whether the regulatory quality in the NMS-10 impacts deepening international financial integration and whether the...

The impact of regulatory quality on deepens level of financial integration: Evidence from the European Union countries (NMS-10)

Published Online: Apr 10, 2023

Page range: 127 - 142

Received: Feb 07, 2023

Accepted: May 08, 2023

DOI: https://doi.org/10.2478/eoik-2023-0004

Keywords
regulatory quality, financial integration, international financial integration, Granger causality, New member states (NMS-10)

© 2023 Azra Ahmić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The impact of regulatory quality on deepens level of financial integration: Evidence from the European Union countries (NMS-10)

Published Online: Apr 10, 2023

Page range: 127 - 142

Received: Feb 07, 2023

Accepted: May 08, 2023

DOI: https://doi.org/10.2478/eoik-2023-0004

Keywordsregulatory quality, financial integration, international financial integration, Granger causality, New member states (NMS-10)

© 2023 Azra Ahmić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
regulatory quality, financial integration, international financial integration, Granger causality, New member states (NMS-10)