Developing Countries Financial Open Timing Decisions And Policies

As the deepening of economic and financial globalization, financial opening of developing countries become an irreversible trend. Although the classical theory of economic growth and the practice in developed countries show that financial opening could increase the economic growth of the country, empirical researches did not only found strong evidence to support the economic growth of developing countries by financial liberalization, but also the frequent occurrence of the financial crisis in these countries arouse reflection of financial opening. This paper based on the viewpoint of financial opening efficiency, through analyzing how initial conditions effecting on opening efficiency and summarizing the experiences of emerging economies, brings up the policy suggestion on financial opening practice of developing countries.This paper includes six chapters.Chapter One is an introduction. It briefly introduces the research background and significance, the main purpose and analysis methods, as well as the full text of the main content and the overall framework arrangements.Chapter Two is the literature review. We generally comment from four aspects just as the main understandings of financial opening, the measurement of financial opening, the economic growth effect and the risk effect of financal opening.Chapter Three is the discussion of theoretical sources of financial opening initial conditions. In this chapter we discussed the action mechanism of initial conditions on economic growth effect by financial opening.Chapter Four is to establish the evaluation system of financial opening’s initial conditions, and based on comprehensive benefits of financial openness, to test and estimate the threshold value of different initial conditions.Chapter Five briefly overviewed the process and development on initial conditions of financial opening in China. With the evaluation system established in last chapter, we do empirical analysis on the maturity of economic and financial conditions when it did financial opening since reform and opening-up (1980to2010) in China, and bring up the policy suggestion to China’s financial Opening.Chapter Six is the policy recommendations for developing countries. Through summarizing practical experience in emerging economies, we bring up the idea that how to manage the impact of international capital flows with macro-prudential management tools.