دانشگاه فردوسی مشهد اقتصاد پولی مالی 2251-8452 مقالات آماده انتشار 2025 12 09 An Analysis of the Determinants of Financial Development in Southeast Asian Countries with an Emphasis on the Role of Economic Freedom تحلیل عوامل مؤثر بر توسعه مالی در کشورهای جنوب شرق آسیا با تأکید بر نقش آزادی اقتصادی 47641 10.22067/mfe.2025.93524.1547 FA فرزانه احمدیان یزدی دانشگاه فردوسی مشهد امیررضا محمدی دانشگاه فردوسی مشهد Journal Article 2025 05 14 Abstract:The global financial crisis has provided important lessons about its impacts and the ways to mitigate its consequences. It has prompted economists to reflect on their role in understanding and managing economic crises. Extensive research has also been conducted to identify weaknesses in economic policymaking. One of the key topics in this context is the examination of the factors influencing financial development, as an efficient financial system can prevent the transmission of negative effects from financial crises to national economies.This paper first reviews the economic strategies adopted by Asian countries in the aftermath of the 2008 crisis and then analyzes the determinants of financial development in a selection of Southeast Asian countries during the period 1980–2021 using the Panel VAR technique. The estimation results indicate that the depth of financial institutions has been the most influential factor in the financial development of these countries. In addition, the findings suggest that economic growth in these countries, driven by economic freedom, has contributed to a higher level of financial development over the study period.1. IntroductionGlobal financial crises—particularly the 2008 crisis—marked a turning point in modern economic history by exposing fundamental weaknesses in the international financial system. Triggered by high-risk policies, excessive reliance on financial credit, and regulatory shortcomings, the crisis quickly evolved into a global phenomenon with severe consequences for economies around the world. In response, governments and regulatory institutions, including those responsible for financial stability, implemented a series of reforms aimed at restoring trust and stabilizing financial markets. These measures, shaped by the lessons of the crisis, now serve as the foundation for regulatory policies in many countries.This study investigates the macroprudential policies and strategies adopted by leading countries in the aftermath of the 2008 financial crisis. With a particular focus on the role of Southeast Asian countries in crisis management, the research analyzes how economic and financial instruments have been employed to enhance resilience and reduce systemic risks. Moreover, by evaluating the successful policy responses of these countries, the study offers practical and adaptable solutions for varying economic conditions. Subsequently, the paper specifically examines the determinants of financial development in a selection of Southeast Asian economies—including China, South Korea, Malaysia, Hong Kong, and Singapore—with an emphasis on the role of economic freedom. This analysis is conducted using a panel Vector Autoregression (Panel VAR) model over the period 1980–2021.2. Literature The 2008 financial crisis, one of the largest and most profound economic crises of the 21st century, had a significant impact on global economic stability. The collapse of major financial institutions and its widespread repercussions prompted policymakers and regulatory bodies to re-evaluate financial system structures. Structural weaknesses in the financial system, insufficient regulation, and ineffective risk management were among the key factors that accelerated the crisis. Furthermore, the complexity of financial instruments and the high interdependence among financial institutions intensified the severity of the crisis (Acharya & Richardson, 2009). In response to the post-crisis need for financial system reform, the Financial Stability Board (FSB) has played a central role in assessing risk management strategies and regulatory reforms. Based on its evaluations, six core areas have been identified to enhance global financial stability in the aftermath of the 2008 crisis—each offering a response to the challenges revealed by the crisis and serving as lessons for the future.3. MethodologyThis study employs a panel Vector Autoregression (VAR) model using panel data. Generally, VAR models treat variables as endogenous, allowing for the examination of impulse response functions. However, in some instances, variables can be treated as exogenous (Canova & Ciccarelli, 2013). In this research, the following variables are considered exogenous: the interaction term of economic growth and economic freedom, financial institutions’ access, depth, and efficiency, as well as financial markets’ access, depth, and efficiency. The financial development index—on which the study is centered—is treated as the endogenous and dependent variable. Additionally, the growth rates of all variables have been calculated and used in the model. The study period spans from 1980 to 2021, with annual data frequency. The selected region of study includes China, South Korea, Malaysia, Hong Kong, and Singapore—chosen for their notable performance in financial and economic indicators.5. ResultBased on the model estimation results, the depth of financial institutions exerts the strongest positive impact on the financial development index in the selected countries. Following this, the efficiency of financial institutions also demonstrates a significant and positive effect on financial development throughout the study period. Moreover, given that one of the objectives of this paper is to examine the role of economic growth—mediated by economic freedom—on the financial development index, the findings indicate that lagged economic growth through the channel of economic freedom has a significant and positive effect on financial development in these countries. This result supports the empirical evidence presented in the paper, suggesting that the economic freedom strategies adopted by these countries—tailored to their specific economic development priorities—can serve as a positive contributing factor in enhancing the impact of economic growth on financial development. بحران جهانی درس‌های مهمی درباره تأثیرات آن و راه‌های کاهش پیامدهایش ارائه می‌دهد. این بحران باعث شده است که اقتصاددانان به بررسی نقش خود در درک و مدیریت بحران‌های اقتصادی بپردازند. همچنین، تحقیقات گسترده‌ای برای شناسایی ضعف‌های موجود در سیاست‌گذاری اقتصادی انجام شده است. یکی از مباحث کلیدی در این زمینه، بررسی عواملی است که بر توسعه مالی تأثیر می‌گذارند، زیرا یک نظام مالی کارآمد می‌تواند از سرایت اثرات منفی بحران‌های مالی به اقتصاد کشورها جلوگیری کند. در این مقاله ابتدا به بررسی استراتژی‌های اقتصادی کشورهای آسیایی پس از بحران ۲۰۰۸ پرداخته شده و سپس به تجزیه و تحلیل عوامل مؤثر بر توسعه مالی منتخبی از کشورهای جنوب شرق آسیا طی دوره زمانی 2021-1980 با استفاده از تکنیک VAR تابلویی می پردازد. بر اساس نتایج حاصل از برآورد الگو عمق مؤسسات مالی در این کشورها مهمترین عامل اثرگذار بر توسعه مالی این دسته از کشورها بوده است. به علاوه یافته های این پژوهش نشان می دهد که رشد اقتصادی در این دسته از کشورها از مسیر آزادی اقتصادی توانسته موجب بالا رفتن سطح توسعه یافتگی مالی آنها طی دوره زمانی مورد مطالعه شود.