Financial development and investment: The case of the Philippines

• Main Authors: Sy, Ederick Meliton, Sy, Johenson Ryan, Tan, Jenilyn, Zozobrado, Karl Agustin
• Format: text
• Language: English
• Published: Animo Repository 2005
• Subjects: Investments > Philippines; Finance > Philippines; Economics
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14353
• Institution: De La Salle University

Financial development is hypothesized to encourage investments by increasing the availability of funds, minimizing the constraints faced by businessmen and reducing transaction costs. Following King and Levine (1993a) we employ four financial development indicators against gross domestic investment as a share of GDP in the Philippines using data from 1965-2003. The effects of financial development of the previous year on investments were also tested. Our evidences suggest that some indicators are significantly associated with investment and the financial development of the previous year is more effective in generating investment.