My dissertation investigates three separate issues pertaining to a country's financial development. The first essay provides an introduction to the three essays. The second essay examines the combined effect of financial development and human capital on economic growth. While both financial development and human capital are individually positively correlated with growth, the literature has not emphasized their combined effect on growth. In this essay, I analyze the extent to which the effect of financial development on growth depends on a country's level of human capital. Using dynamic panel difference and system GMM, as well as the pooled OLS, I find that an increase in human capital decreases the impact of financial development on growth and that countries that lack financial development can achieve greater economic growth through an improvement in human capital. The third essay analyzes how currency unions affect the financial development of a country. This essay tests two forms of asymmetries on the effect of currency unions on financial development; I analyze if currency unions have an equal effect on various forms of financial development, and whether high-income and low-income countries are impacted differently. I find some evidence in favor of both forms of asymmetries with pooled OLS and fixed effect estimation using data on 152 countries and territories over the 1970-2006 time period. The fourth essay tests how financial development affects firms' export market participations and the volume of exports utilizing a firm-level data set which incorporates about 43,500 firms from 80 countries for the time period 2002-2009. Using an instrumental variable approach, I find that a country's financial development negatively affects the extensive margin of trade and positively affects the intensive margin of trade. Furthermore, this study finds that financial development has a disproportionate positive affect on firms with a higher level of external dependence for both margins of trade. Finally, I find that financial development exerts an asymmetric effect on young and mature firms in their export participations but not on the volume of exports.

AN ABSTRACT OF THE DISSERTATION OFThaman Bastola, for the Doctor of Philosophy degree in Economics, presented on April 2, 2024, at Southern Illinois University Carbondale. TITLE: REMITTANCES IN NEPAL; LANDLOCKEDNESS AND INTERNATIONAL TRADE MAJOR PROFESSOR: Dr. Sajal LahiriThis dissertation concentrates on two key economic areas: trade and remittances. Executing many empirical models using relevant data and estimation techniques on each of these topics, we provide some novel findings about trade in landlocked countries and micro-level determinants of remittances in a landlocked country. The international trade of landlocked countries is critical, experiencing adverse geographical effects for exporting or importing. The first paper of this dissertation focuses on analyzing the impact of preferential trade agreements (PTAs) on the trade of landlocked countries. We find the more significant positive impact that calls for a strategy to join a PTA to address poverty and speed up the growth process through trade in landlocked developing countries. The second paper attempts to determine the probability of remittances related to micro-socioeconomic factors in a landlocked country, Nepal. The results show that gender, caste and ethnicity, income, language, religion, household size, wealth, age, and employment affect the probability of domestic or foreign remittances. The third paper is an extension of the second one, which examines Nepal's extensive and intensive margins of remittances. Most variables exhibit an opposite sign for foreign remittances between the extensive and intensive margins. Groups of households that display a higher rate of migration receive lower amounts of foreign remittances and vice-versa. On the other hand, the results somewhat diverge for domestic remittances, such as wealth have a positive effect in both margins but gender have a opposite effect between two margins; even though many variables are statistically insignificant, either extensive or intensive margins of remittances.

En dépit du renforcement de leur ouverture commerciale, le commerce extérieur des pays du Mashrek a presque toujours affiché des chiffres plutôt négatifs. Selon la littérature, l'ouverture commerciale est une des conditions permettant une croissance vigoureuse d'un pays. Néanmoins, la tendance constatée à la lumière des données du commerce de ces pays, traduirait une réalité alarmante. L'ouverture ne s'est pas traduite par une accélération des niveaux des investissements, ni par une création d'emplois. Est-ce que les politiques commerciales et de change menées par les pays du Mashrek sont responsables de cette persistance des déficits commerciaux ? Motivée par l’aggravation remarquable du solde de la balance commerciale libanaise survenue dans le profil global des échanges extérieurs du Liban, la présente recherche examine le comportement dynamique des exportations et importations libanaises en comparaison avec ses pays voisins (la Syrie, l’Egypte et la Jordanie) dans un contexte économique régional et international en mutation, en proposant une analyse empirique des déterminants des flux commerciaux ayant pour objet d’établir dans quelle mesure la politique commerciale et de change seraient responsables des faits stylisés observés. / Despite the strengthening of their commercial openness, the Mashreq countries trade has rather always displayed negative results. According to the literature, opening up trade is one of the conditions leading to any country’s vigorous growth. Nevertheless, the trend found in the light of these countries’ trade data, indicates an alarming reality. The openness was neither translated into accelerated levels of investments nor created new job opportunities. Are the trade and exchange rate policies pursued by the Mashreq countries responsible for this persistence in trade deficits ? Motivated by outstanding worsening deflection of the trade balance in the overall Lebanese external trade profile, the current research examines the dynamic behavior of the Lebanese exports and imports compared to its neighboring countries (Syria, Egypt, and Jordan) in a regional and international changing economic context. An empirical analysis of the trade flows determinants was adopted in order to establish to what extent the trade and Exchange policies would be responsible for the observed stylized facts.