In an emerging market economy, the financial globalization process further weakens the credit culture by allowing domestic banks to borrow abroad.

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The statement is true. In emerging market economies, financial globalization allows domestic banks to borrow from foreign sources, which may weaken their credit culture because they are not subject to the same regulatory oversight and scrutiny as domestic lenders. This can lead to increased risk-taking and a decline in lending standards, making it easier for borrowers to obtain credit but increasing the likelihood of defaults and financial instability.

In an Emerging Market Economy, the Financial Globalization Process Further