Is full banking integration desirable?

Iván Arribas, Jesús Peiró-Palomino and Emili Tortosa-Ausina

Journal of Banking & Finance, 2020, vol. 112, issue C

Abstract: We analyze the links between banking integration and economic development for a sample of OECD countries. We measure banking integration considering indicators that merge not only openness but also connectedness with other banking systems. We plug these indicators into income regressions, also controlling for other relevant variables considered by the literature. In contrast to previous initiatives, this second stage explicitly takes into account the differing levels of economic development of the countries in our sample, since the benefits of enhanced banking integration might not be generalizable. To this end, we implement quantile regression, also considering the presence of endogenous regressors. Results show that bank connectedness is more important for economic development than bank openness, but the combined effect (i.e., banking integration) overall is positive and significant. The quantile regression models used in the second stage show that the effects are stronger for the poorest economies.

Keywords: Banking; Growth; Integration; Quantile regression (search for similar items in EconPapers)
JEL-codes: C21 F15 F36 F62 F65 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426617301887
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Is full banking integration desirable? (2015)
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:eee:jbfina:v:112:y:2020:i:c:s0378426617301887

DOI: 10.1016/j.jbankfin.2017.08.002

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().