Social Capital and Financial Development: The Case of IRAN (1971-2006)



In this paper, I investigated the determinants of financial development with emphasis on social capital. First, I explain the relationship between financial development and its determinants, then estimate the model with Gregory–Hansen (1996) and Johansen-Juselious cointegration techniques in I.R. of IRAN (1971-2006). The results showed that, inflation and decline in social capital and weak property rights have the negative and significant effects on financial development.
JEL Classification: G21, K42, O17, Z13