Determinants of Financial Sector Development Using the IMF Index: A Comparative Study Between Libya and Arab Countries
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Financial Development, IMF Index, Financial Depth, Financial Inclusion, Financial Efficiency
Abstract
This study aims to examine the key determinants of financial sector development in Libya compared to other Arab countries, utilizing the International Monetary Fund’s (IMF) composite Financial Development Index. This index evaluates financial development across three dimensions: financial depth, financial access (inclusion), and financial efficiency. To achieve the study’s objectives, a comparative approach was adopted, using annual secondary data covering the period from 2000 to 2020. The empirical analysis employed t-tests and a regression model. The findings reveal that Libya’s financial sector is less developed than those of the other Arab countries in the sample. This underdevelopment is primarily attributed to the inefficiency of Libyan banks in utilizing financial resources and the limited level of financial inclusion, reflected in restricted access to financial services.
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