Introducing a New Broad-based Index of Financial Development
IMF Working Papers, January 12, 2016
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- Introducing a New Broad-based Index of Financial Development
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Bibliographic details
- Authors: Katsiaryna Svirydzenka
- Published: January 12, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513583709.001
Summary and contribution
- A typical empirical study approximates financial development with either one of two measures of financial depth – the ratio of private credit to GDP or stock market capitalization to GDP.
- These single indicators do not capture the complex multidimensional nature of financial development.
- This paper creates nine indices that summarize how developed financial institutions and financial markets are in terms of their depth, access, and efficiency.
- The nine indices are aggregated into an overall index of financial development.
- With coverage of 183 countries on annual frequency between 1980 and 2013, the database is presented as a useful analytical tool for researchers and policy makers.
Methodology and index structure
- Nine indices are constructed to capture:
- Depth (for financial institutions and financial markets)
- Access (for financial institutions and financial markets)
- Efficiency (for financial institutions and financial markets)
- These component indices are aggregated into an overall Financial Development (FD) Index.
Data coverage and availability
- Country coverage: 183 countries.
- Frequency: annual.
- Time span: between 1980 and 2013.
- Notes: The file accompanying this working paper is an updated version of the Financial Development Index that came out with the earlier Staff Discussion Note 15/07. A data appendix for this paper is referenced.
Subjects and keywords
- Subjects: Financial institutions, Financial markets, Financial sector development, Market capitalization, Securities, Securities markets, Stock markets
- Keywords: a number of indices, efficiency measure, FD Index, FD index vis-à-vis, Financial Development, financial institution access, Financial Institutions and Markets, financial institutions efficiency, financial market access, financial market development, financial market indicator, Financial sector development, GDP, Global, index, market, Market capitalization, return on equity, Securities, Securities markets, Stock markets, WP
Source: IMF Working Paper "Introducing a New Broad-based Index of Financial Development" by Katsiaryna Svirydzenka (January 12, 2016).