The political economy of finance: the relationship between press freedom and financial development

Abstract In recent years, there has been growing scholarly interest in the political and institutional determinants of financial development; however, important gaps remain in understanding these dynamics. This study represents the first comprehensive attempt to examine how press freedom affects financial development in BRIST countries (Brazil, Russia, India, South Africa, and Turkey) over the period 2002–2021. Using second-generation panel techniques that account for cross-sectional dependence and heterogeneity, the results reveal that press freedom exerts a positive and statistically significant impact on financial development across all BRIST economies. Furthermore, economic growth and trade openness are found to promote financial development, while income inequality hampers it. Although the strength of these relationships varies across countries, the overall panel findings are robust. The results suggest that enhancing media freedom, alongside implementing sound economic and institutional reforms, can play a crucial role in deepening financial systems in major emerging markets.