Promotion of foreign direct investment (FDI) and trade liberalization on both global and regional levels has been considered to be beneficial for the economic development of developing countries. Current WTO rules support regional trade liberalization and prohibit certain trade-related...

The present contribution tests whether countries can be pooled when studying the financegrowth nexus. Overall, our results point toward a ‘pragmatic’ positive answer, though considerable heterogeneity is present among developing countries.