Regional disparities in financial development: New evidence from the Selected Asian countries

Bidisha Mukhopadhyay; Rudra P. Pradhan

Volume : VIII, Issue : VI, June - 2019

Regional disparities in financial development: New evidence from the Selected Asian countries

Bidisha Mukhopadhyay, Rudra P. Pradhan

Abstract :

This paper introduces a new composite index of financial development across 10 Asian countries [top 10 according to World Bank Report, 2009 on the basis of GDP (PPP)], namely Japan ,China, India, South Korea, Indonesia, Thailand, Hong Kong, Malaysia, Singapore and Pakistan over the last three decades. This database is unique in that it unites a wide variety of indicators that measure the size, activity and efficiency of financial intermediaries and markets. Hence, this paper investigates the regional disparities in financial development in selected Asian countries. In this context study has been done by compå composite indices of financial development both with respect to individual country wise different weights as well as common weights for all the countries. The analysis is based on Principal Component Analysis (PCA) for composite index formation. . The findings are statistically very significant to warrant major changes in future regional policies in order to remove rising regional disparity in financial development over the Asian developing countries. This paper describes the sources, the construction and the intuition for the different indicators of financial development.