Linkage between Financial Development, Financial Crisis and Globalization in India: VARX and ARDL co-integration assessments

In this paper, the long-run causality between financial development, financial crisis and globalization. trade and financial openness. in India is investigated through the co-integration techniques of the VARX and ARDL methods. The main finding is that although the single impact of either trade or financial openness is uncertain, the simultaneous opening of the two sectors contributes to financial development. Another finding is that the growing presence of international trade is relevant to the occurrence of financial crisis. Policymakers, especially those of developing countries, need to recognize these effects of trade and financial openness in designing development plans. Copyright (C) 2013 JAEBR