Trade and financial openness and financial development : is there asymmetric co-integration relationship ? evidence from Jordan

Abstract EN

The current study attempts to explore the asymmetric long-run equilibrium relationship between trade and financial openness and financial development, especially in banking sector.

Using Jordanian data, over the period 1980 to 2019.

The study has found evidence of asymmetry pattern in the relationship between trade and financial openness and the credit to private sector ratio.

From estimation of error-correction model, the adjustment back to equilibrium is more rapid following relative increase in trade and financial openness compared to relative decrease in trade and financial openness