Does Fiscal Transparency Matter for Bank Development? A Lookup on Emerging and Developing Countries
Jan 19, 2023
About this article
Published Online: Jan 19, 2023
Page range: 107 - 148
Received: Jul 19, 2021
Accepted: Nov 11, 2021
DOI: https://doi.org/10.2478/jcbtp-2023-0006
Keywords
© 2023 Emna Trabelsi, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.
This paper examines how fiscal transparency is linked to bank development. It also hypothesizes that the effect is mediated by reasonable channel(s). Drawing upon a panel dataset of emerging and developing economies, we find that fiscal transparency is positively related to the private credit and to the ratio of liquid assets, implying that more transparent policies enhance bank development. Our panel regressions and the mediation analysis also suggest that the effect of fiscal transparency on private credit is significantly transmitted through the control of corruption, while it has a direct effect on the ratio of liquid assets.