Opening up trade and finance boosts banking sector development in closed economies.
The study looked at how trade and financial openness affect banking sector development in different countries. They found that both types of openness play a significant role in financial development. Countries that are less open to trade or finance can benefit the most from opening up. Even if a country only opens up one aspect, like trade or finance, it can still see improvements in its banking sector. This supports the idea that both trade and financial openness are important for financial development.