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Ammar Shamaileh
''Barriers to Financial Institutional Development: A Preliminary Theoretical Exploration of Social Capital, Growth and Institutional Development''
( 2018, Vol. 38 No.1 )
This note sets forth a preliminary theoretical analysis of the role that social capital plays in the decision faced by states to develop their financial institutions. While financial institutional development has been considered to play a role in both translating portfolio and foreign direct investment into growth, many states choose not to develop their financial institutions. This article analyzes this problem through a simple signaling model related to the underlying levels of social capital within a state, and finds that social capital's effect on the decision to develop financial institutions is tied to the ability of social capital to translate investment into growth.
Keywords: Social Capital, Economic Growth, Institutional Development, FDI
JEL: H8 - Public Economics: Miscellaneous Issues: General
Description of Appendix:

Proofs and Semi-Pooling Equilibria
Manuscript Received : Nov 03 2017 Manuscript Accepted : Feb 09 2018

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