Measuring complementarity in financial systems

Adeline Saillard (adeline.saillard@univ-paris1.fr) and Thomas Url (thomas.url@wifo.ac.at)
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Adeline Saillard: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Thomas Url: WIFO - Austrian Institute of Economic Research

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: The distinction between bank and market based economies has a long tradition in applied macroeconomics. The two types differ not only in the level of financial activity channeled through the stock market and private banking, but also in their institutional frameworks. We challenge this traditional distinction between the two types of financial architecture. We develop an index that accounts for complementarity between financial markets and banking systems that has been hypothesized by Sylla (1998) and Song and Thakor (2010). The theoretical foundation of our empirical approach is the general equilibrium framework by Freixas and Rochet (1997). We validate the proposed index and the underlying theory of complementary using a random coefficient and a Generalized estimating equations (GEE).

Keywords: financial structure; Bank-based; market-based; complementarity; efficiency; financial structure.; Structure financière; complémentarité; efficacité. (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-ban and nep-cba
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Published in 2012

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