A lesson from Asian banking crisis to the last US and UE ones: a spatial econometric approach

Mohamed Bilel Triki and Samir Maktouf

International Journal of Economics and Business Research, 2014, vol. 7, issue 3, 305-320

Abstract: To find a lesson to US and UE banking crises, this paper studies the factors associated with the emergence of banking crises during the process of financial liberalisation in a large sample of cross-countries in 1989-1997 using a spatial Durbin model in a panel data econometrics. The empirical results suggest that financial liberalisation has the tendency to stimulate the banking instability in emerging economies. Then we find evidence that the measures of bank regulation variables also contributed, either positively or negatively, towards the observed crisis outcomes, with poor institutional environment playing a particularly significant role. The inclusion of regional variables has a major effect on the estimations, even if most of the qualitative results are preserved. Indeed, some estimated coefficients become larger and more significant when the regional variables are included. And the great virtue of economic downturn is then to remind us that we can not sustainably invest resources in doubtful productivity sectors.

Keywords: banking crisis; spatial Durbin model; financial liberalisation; institutional environment; spatial econometrics; banking instability; emerging economies; bank regulation; regional variables; economic downturn; financial crisis. (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:7:y:2014:i:3:p:305-320

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