The role of the government in financial sector development

Arusha Cooray

Economic Modelling, 2011, vol. 28, issue 3, 928-938

Abstract: This study examines the impact of two dimensions of the government, namely, size and quality, on two dimensions of the financial sector, size and efficiency, in a cross section of 71 economies. The study finds that increased quality of the government as measured by governance and legal origin positively influences both financial sector size and efficiency. The size of the government proxied by government expenditure and the government ownership of banks has a negative effect on financial sector efficiency, and a positive impact on financial sector size, particularly in the low income economies.

Keywords: Financial; sector; size; Financial; sector; efficiency; Government; size; Government; efficiency; Government; ownership; of; banks; Governance; Legal; origin; Cross; country (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (27)

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