Volume 1 • No.2 | December, 2017
The Relationship between Net Foreign Assets Positions and Financial Development – Cases from Developing Countries in Asia
Nguyen Thi Lien Hoa, Huynh Thi Phuong Lan, Le Thi Hong Minh
Abstract:
This research examines the relationship between the net foreign asset position (NFA) and financial development of ten developing countries in Asia over the period 1973-2013. Using the Pooled Mean Group (PMG) method, the research results provide empirical evidence that financial development (measured through private credit/GDP ratio and bank credit to bank deposit ratio) contributes to the reduction in the net foreign asset position in the long run of a country, thus reducing the current global imbalance.
JEL classification: C58 . E44 . F36 . F37.
Citation: Nguyen Thi Lien Hoa, Huynh Thi Phuong Lan & Le Thi Hong Minh (2017). The Relationship between Net Foreign Assets Positions and Financial Development - Cases from Developing Countries in Asia.