Investigating the Determinants of Financial Development in OPEC Countries: An Application of Bayesian Model Averaging Approach

Authors

  • Maryam Barzegar Marvasti Researcher, Young Researchers Club, Shiraz Branch, Islamic Azad University, Shiraz, Iran
  • Somayeh Razzaghi Assistant professor, Bu-Ali Sina University, Iran

Abstract

The purpose of this study is to investigate the most significant determinants of financial development in OPEC countries during 2014-2016. To this end, this paper considered 34 explanatory variables including several economic and policy variables determining four different aspects of financial development as the degree of depth, efficiency, stability and quality of financial services. In order to obtain more reliable results and overcome the uncertainty problem in this study, we applied Bayesian Model Averaging (BMA) technique. The results indicated that better institutional indicators such as rule of law, government effectiveness, and corruption avoidance are associated with greater financial depth, efficiency, and stability. More importantly, the results revealed that the development in the oil sector could support financial development, and in particular contribute to greater depth and efficiency of the stock market. There are some important implications in this research for policymakers to promote financial development in OPEC countries.Keywords: Financial development, Oil, OPEC, Bayesian model averagingJEL Classifications: G10, G20, C11DOI: https://doi.org/10.32479/ijeep.8498

Downloads

Download data is not yet available.

Downloads

Additional Files

Published

2019-11-13

How to Cite

Marvasti, M. B., & Razzaghi, S. (2019). Investigating the Determinants of Financial Development in OPEC Countries: An Application of Bayesian Model Averaging Approach. International Journal of Energy Economics and Policy, 10(1), 342–352. Retrieved from https://econjournals.com.tr/index.php/ijeep/article/view/8498

Issue

Vol. 10 No. 1 (2020)

Section

Articles

License

Submission of an article implies that the work described has not been published previously , that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, will not be published elsewhere in the same form, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication.