Financial development index: A theoretical and practical overview in ASEAN countries

Abstract

This paper is intended to provide a theoretical and practical overview of financial development
index in the 10 ASEAN countries consisting of Brunei, Indonesia, Cambodia, Laos, Myanmar, Malaysia,
Philippines, Singapore, Thailand and Vietnam between 2002 and 2020. The data sample was collected by
the author from the World Bank database. To practically clarify financial development index, the author has
applied the Generalized Method of Moments (GMM) to estimate its determinants and revealed that financial
development index is positively correlated to economic growth and trade openness. However, any increase
in inflation may lead to a fall in financial development index. These results are valuable empirical evidence to
the ASEAN countries, especially in developing new policies to improve their financial development index