Financial Development, Rule of Law and Wealth Inequality: Bayesian Model Averaging Evidence

Roman Horvath, Eva Horvatova and Mária Širaňová

No 368, Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies)

Abstract: We examine the determinants of financial development using our global sample and employing a rich set of measures of financial development that assess the degree of depth, access, stability and efficiency of financial intermediaries. We use Bayesian model averaging to test competing theories within this unifying framework. Examining nearly 40 potential determinants of financial development, we find that the rule of law and the level of economic development are the most important. Wealth inequality is irrelevant for banking sector development but positively associated with stock market development. Finally, our results suggest that financial market regulations matter for stock market efficiency and financial stability.

Keywords: Financial development; Bayesian model averaging; rule of law; wealth inequality (search for similar items in EconPapers)
JEL-codes: G10 G20 (search for similar items in EconPapers)
Pages: 37
Date: 2017-09
New Economics Papers: this item is included in nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.dokumente.ios-regensburg.de/publikationen/wp/wp_368.pdf (application/pdf)

Related works:
Working Paper: Financial development, rule of law and wealth inequality: Bayesian model averaging evidence (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ost:wpaper:368

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies) Contact information at EDIRC.
Bibliographic data for series maintained by Kseniia Gatskova ( this e-mail address is bad, please contact ).