Journal of Applied Finance & Banking

What Determines Trade Liberalization in Banking Services under the WTO?

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• Abstract

  This paper investigates the determinants of trade liberalization in banking services under the WTO. The estimated results point out that an increase in per capita GDP, an increase in lending to private sector, a decrease in corruption, an increase in legal system power, an increase in government effectiveness, an increase in regulatory quality, and an increase in rule of law, altogether contribute to the greater degree of liberalization in banking services commitments. In contrast, countries with membership in the Cairns Group, an increase in financial trade openness, an increase in stock traded value, and an increase in restricting bank’s activities in nonfinancial firms, insurance, real estate, and securities, entirely play a role in determining a lower level of banking services commitments.