<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The paper seeks to empirically explore the variations and changes in the degree of International Financial Integration (IFI) between the European Transition countries and Post-Transition countries between 2000 and 2016. The estimation of parameters was made using the Generalized Method of Moment (GMM) approach. The findings of the study reveal that European Post-Transition countries have relatively more developed financial systems compared to European Transition countries, where private credit market is still playing an overwhelmingly important role in a financial system while stock markets are in an early stage of development constituting a relatively small share of the financial system. Even though in Panel 3 there are significant control variables, our findings reveal that IFI in European transition countries are affected neither by stock market capitalization and private credit markets. Consequently, they can’t be used in this stage of financial development for explanation of variations and changes in the degree of IFI.</p></abstract>

The paper seeks to empirically explore the variations and changes in the degree of International Financial Integration (IFI) between the European Transition countries and Post-Transition countries between 2000 and 2016. The estimation of parameters was made using the Generalized Method of Moment (GMM) approach. The findings of the study reveal that European Post-Transition countries have relatively more developed financial systems compared to European Transition countries, where private credit market is still playing an overwhelmingly important role in a financial system while stock markets are in an early stage of development constituting a relatively small share of the financial system. Even though in Panel 3 there are significant control variables, our findings reveal that IFI in European transition countries are affected neither by stock market capitalization and private credit markets. Consequently, they can’t be used in this stage of financial development for explanation of variations and changes in the degree of IFI.

Are Determinants of International Financial Integration in the European Transition Countries Different from Post-Transition Countries?

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The paper seeks to empirically explore the variations and changes in the degree of International Financial Integration (IFI) between the European Transition...

Are Determinants of International Financial Integration in the European Transition Countries Different from Post-Transition Countries?

Published Online: May 20, 2020

Page range: 40 - 54

DOI: https://doi.org/10.2478/sbe-2020-0005

Keywords
international financial integration, European Transition and Post transition countries, Generalized Method of Moment (GMM) approach, Financial Market Development Indicators

© 2020 Ganić Mehmed, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Are Determinants of International Financial Integration in the European Transition Countries Different from Post-Transition Countries?

Published Online: May 20, 2020

Page range: 40 - 54

DOI: https://doi.org/10.2478/sbe-2020-0005

Keywordsinternational financial integration, European Transition and Post transition countries, Generalized Method of Moment (GMM) approach, Financial Market Development Indicators

© 2020 Ganić Mehmed, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
international financial integration, European Transition and Post transition countries, Generalized Method of Moment (GMM) approach, Financial Market Development Indicators