Finance for growth: does a balanced financial structure matter?

Arbeitspapier

In this paper we explore empirically a long-standing question in the literature on finance for growth, namely whether the financial structure -in terms of the size of the banking system relative to the capital market- matters for economic growth. We build upon the existing literature by constructing a new measure of the balancedness of the financial structure which is broader, as it includes the domestic bond market as well as external sources of financing. It is also bounded and more linear than existing ones. We find that a more balanced financial structure -in terms of the size of banks relative to the capital markets- is associated with higher economic growth. Such finding points to banks and capital markets being more of a complement than a substitute. This is in line with Greenspan's idea of one market serving as spare wheel of the other.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Kiel Advanced Studies Working Papers ; No. 445

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; International Financial Markets ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: financial structure ; banking system ; capital market ; economic growth ; Kapitalstruktur ; Bankensystem ; Finanzmarkt ; Wirtschaftswachstum ; Welt

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Cuadro-Sáez, Lucía ; García-Herrero, Alicia
• Ereignis: Veröffentlichung
• (wer): Kiel Institute for the World Economy (IfW)
• (wo): Kiel
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/27022
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ