The Impact of Trade Openness on Financial Development for selected Developing Countries during the Period 1990-2008

Economic growth is one of the goals any country that always been considered by policy makers and planners. In recent years researching the relationship between financial development and economic growth is of particular importance and intensive studies have been performed in this field. On the other hand, financial development is caused by a factor, such as trade liberalization. The usual view is that, trade liberalization with led securities to the efficient investment opportunities will lead to financial market development. But there is a different opinion about this theory they believe trade development is limited to financial economics. In this regard, this study tries to investigate by using panel data for the group of developing countries that their financial system is the same (The indicators of financial development). The results of this study show that trade openness policies for financial development that now is a major economy of the countries, is not appropriate, at least in the early stages.