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Using cross country data, we explore the role of linguistic structures for the financial development of countries. Specially, we investigate if future time reference (FTR), the requirement of an obligatory future tense marking in languages, matters for financial development or not. Our results show that countries speaking weak FTR language or a language not needing a dedicated future tense marking have enhanced financial development relative to countries speaking strong FTR language. Discounting the future less or having a connection between the present and the future—characteristics of weak FTR languages—has implications for caring about saving and investment, having efficient property rights, protection of shareholders and cost of acquiring information. Our results are robust to multiple measures of financial development and inclusion of determinants of the same. Finally, results show that weak FTR language speaking countries benefit more when their financial development is low. [ABSTRACT FROM AUTHOR]

This paper examines the interactive impact of financial development and political institutions on a specific development outcome: gross domestic investment. We explore whether financial development and political institutions act as substitutes or complements in the context of domestic investment. Using data from the period 1975–2017 for 131 countries to construct annual and five-year interval panels, we employ Fixed Effect (FE) and Dynamic Panel estimators (System GMM) to test our hypothesis. We find a significant interactive impact of political institutions and financial development on domestic investment. More specifically, we find a substitution effect among these factors. In the presence of inefficient institutions, financial development mitigates the negative impact of political institutions on domestic investment, and vice-versa. [ABSTRACT FROM AUTHOR]

This article investigates the role of political institutions and culture in creating an efficient financial infrastructure for a country. It further delves into this relationship and addresses the question: do both types of institutions mentioned above affect financial development of a country, jointly? Our findings support the established notion in the literature that institutions matter for financial development. We show both these types of institutions - political institutions and culture - jointly promote financial development. Further, our result stresses that these two types of institutions behave as complements - the presence of efficient political institutions augment the effectiveness of culture and, thus, financial development is enhanced. Our results are robust to various proxies of institutions and alternate estimation models. [ABSTRACT FROM AUTHOR]

This article investigates the missing link in the literature - whether informal institutions, or what is known as culture, can affect the level of financial development for a country? Our hypothesis stresses that the cultural dimensions of a country can have an impact on its financial set-up. We consider multiple dimensions of culture, identified in the literature by Tabellini (2008), to test our hypothesis. As culture evolves in the form of greater trust, control and other traits, individuals' attitudes towards financial market change, and they engage in greater financial transactions. This, in turn, leads to better financial development. Using quantile estimation technique for a cross section of 90 countries, we find that culture significantly influences the level of financial development. To ensure the robustness of our findings we use Hofstede's cultural dimension - 'Uncertainty Avoidance Index' (UAI) - as an alternative measure for culture. Our results hold for multiple measures of financial development. [ABSTRACT FROM AUTHOR]