Is Government Ownership of Banks Really Harmful to Growth?

Svetlana Andrianova, Panicos Demetriades and Anja Shortland ()

CEDI Discussion Paper Series from Centre for Economic Development and Institutions(CEDI), Brunel University

Abstract: We show that previous results suggesting that government ownership of banks has a negative effect on economic growth are not robust to adding more 'fundamental' determinants of economic grwoth, such as institutions. We also present regression results from a more recent period (1995-2007) which suggest that, if anything, government ownership of banks has been associated with higher long run growth rates, even after controlling for institutions and other variables suggested by the growth literature. Drawing on the current global financial crisis, we provide a conceptual framework which explains why under certain circumstances government owned banks could have a greater effect on economic growth than privately-owned banks.

Pages: 17 pages
Date: 2009-05
New Economics Papers: this item is included in nep-ban and nep-fdg
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Is Government Ownership of Banks Really Harmful to Growth? (2010)
Working Paper: Is Government Ownership of Banks Really Harmful to Growth? (2009)
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