The impact of foreign direct investment on financial development in Asian countries

This paper empirically studies the impact of foreign direct investment (FDI) on financial development from 37 Asian nations covering the period 2001-2020 from a panel data set. The findings show that FDI has a positive impact on financial development, implying the spill-over effect of FDI in Asian financial markets. Furthermore, this study discovers that trade openness and population growth have a positive impact on financial development, while inflation affects financial development negatively. However, it is found that there is no relationship between government consumption and financial development in the Asian context