Financial Liberalization, Capital Movements, and Economic Growth in Asia: A Panel Structural VAR Approach

Bilgili F., Doğan İ., Koçak E., Kuşkaya S.

in: Economic Growth and Financial Development, Muhammad Shahbaz,Alaa Soliman,Subhan Ullah, Editor, Springer, London/Berlin , Zug, pp.135-153, 2021

  • Publication Type: Book Chapter / Chapter Research Book
  • Publication Date: 2021
  • Publisher: Springer, London/Berlin 
  • City: Zug
  • Page Numbers: pp.135-153
  • Editors: Muhammad Shahbaz,Alaa Soliman,Subhan Ullah, Editor
  • Erciyes University Affiliated: Yes


There has been intensive research in the literature of macroeconomics examining the nexus between finance, capital movements, and economic growth to explore the impact of each variable on other variables in the system. One might claim that these researches, needless to say, are seminal and have some considerable outputs. The relevant literature, however, conducts mostly the estimations from macro-econometric models in which structural impulse responses are not monitored. Therefore, this chapter aims at launching panel structural VAR (panel SVAR) model estimations by loading relevant matrices for the decomposition of the shocks into common and composite shocks through recursive impulse responses by a triangular matrix. The contemporaneous impact of a shock in a panel variable on other panel variables are, hence, straightforward and transparent in panel SVAR. The models of panel SVAR of this chapter employs 24 Asian countries for the period 1994–2017. The 576 observations from three different panel SVAR model predictions reveal in general that panel Asian GDP responds positively to the shocks in panel Asian financial development index, financial markets access index, financial markets efficiency index, and gross fixed capital formation.