Do industrialization, democracy, and financial openness promote financial development? Evidence from Turkey

This study aims to unweil the determinants of financial development, particularly the impact of industrialization, democracy, and financial openness on financial development in Turkey over the 1975-2015 period, using a bounds testing approach. It is found that (i) financial development and its main determinants are co-integrated; (ii) democracy is positively associated with financial development, whereas financial openness is associated with lower financial development; and (iii) industrialization is not a significant determinant of financial development in Turkey. Based on the obtained results, some recommendations are also provided.