Trade in Financial Services: Procompetitive Effects and Growth Performance

Joseph Francois () and Ludger Schuknecht ()

No 99-028/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In this paper we explore linkages between financial services trade and growth. We offer a formalization of the argument that trade, through the fostering of financial market integration, may yield important long-run effects related to increased competition. The relationships formalized here link long-run economic performance to scale economies and cost structures in the financial services sector, and to market concentration in the sector. We first develop an analytical model. This motivates an econometric exercise. Cross- country growth regressions point to a strong positive relationship between financial sector competition and financial sector openness, and between growth and financial sector competition.

Keywords: financial services trade; service trade and imperfect competition; trade in services and growth (search for similar items in EconPapers)
JEL-codes: F40 F13 F43 (search for similar items in EconPapers)
Date: 1999-04-14
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Related works:
Working Paper: Trade in Financial Services: Procompetitive Effects and Growth Performance (1999)
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:uvatin:19990028

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