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on Financial Development and Growth |
| By: | Alessandra Bonfiglioli |
| Abstract: | Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investments. I provide empirical evidence from a sample of 93 countries observed between 1975 and 1999. The results suggest that financial integration has a positive direct effect on productivity, while it spurs capital accumulation only with some delay and indirectly, since capital follows the rise in productivity. I control for indirect effects of financial globalization through banking crises. Such episodes depress both investments and TFP, though they are triggered by financial integration only to a minor extent. |
| Keywords: | Capital account liberalization, financial development, banking crises, growth, productivity, investments |
| JEL: | G15 F43 O40 C23 |
| Date: | 2007–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:680.07&r=fdg |
| By: | Ögren, Anders (EHF/SSE & EconomiX - UPX) |
| Abstract: | The development of a well adapted financial system was a main part of the successful Swedish economic modernization in the latter half of the nineteenth century. In this paper it is shown that this development followed the pattern of a financial revolution. Major institutional and organizational changes that took place roughly between the late 1850s and early 1870s led to a rapid increase in liquidity and financial services. This financial revolution preceded the acceleration in economic growth in general and in the modern, industrial sector in particular. Especially the monetization encouraged growth, both in the industrial sector and in GDP as a whole. The basis of the financial system, measured as commercial bank assets and equity capital, was on the other hand also a result of GDP growth. |
| Keywords: | Financial Development; Growth; Institutions; Liquidity; Monetization; Nineteenth Century; Silver and Gold Standards; Structural Change |
| JEL: | E44 N13 N23 O16 |
| Date: | 2006–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0650&r=fdg |
| By: | Cull, Robert; Martinez Peria, Maria Soledad |
| Abstract: | This paper describes the recent trends in foreign bank ownership in developing countries, summarizes the existing evidence on the causes and implications of foreign bank presence, and reexamines the link between banking crises and foreign bank participation. Using data on the share of banking sector assets held by foreign banks in over 100 developing countries during 1995-2002, the results show that countries that experienced a banking crisis tended to have higher levels of foreign bank participation than those that did not. Furthermore, panel regressions indicate that foreign participation increased as a result of crises rather than prior to them. However, post-crisis increases in foreign participation did not coincide with increased credit to the private sector, perhaps because in many cases foreign banks acquired distressed banks. |
| Keywords: | Banks & Banking Reform,Foreign Direct Investment,Corporate Law,Privatization,Financial Crisis Management & Restructuring |
| Date: | 2007–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4128&r=fdg |