Banking Network Multiplier effects on cross-border bank inflows

Shugo Yamamoto

International Review of Economics & Finance, 2020, vol. 70, issue C, 493-507

Abstract: Correlation of cross-border bank inflows has surged since the mid-1990s. Spatial dependence of the dependent variable is well known to engender bias in estimation when applying traditional estimation approaches to sample data of this type. By applying a spatial econometric model with global push factors or country-specific pull factors as intrinsic shocks, we demonstrate that increased cross-border bank inflows of a certain country strongly amplify self-propagation effects on other countries, constituting the Banking Network Multiplier (BNM) effect. Results reveal a strong core–periphery structure, with the BNM distribution concentrated in the United States and a few countries.

Keywords: Banking Network Multiplier effects; Core–periphery; Spatial effect (search for similar items in EconPapers)
JEL-codes: F30 F34 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:70:y:2020:i:c:p:493-507

DOI: 10.1016/j.iref.2020.06.003

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