The finance-growth nexus and public-private ownership of banks in Brazil since 1870

Nauro Campos, Menelaos Karanasos, Panagiotis Koutroumpis () and Ekaterina Glebkina
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Nauro Campos: University College London
Menelaos Karanasos: Brunel University London
Panagiotis Koutroumpis: University of Sussex
Ekaterina Glebkina: Brunel University London

Annals of Operations Research, 2025, vol. 352, issue 3, No 19, 835-858

Abstract: Abstract How does finance affect economic growth? And does ownership matter? This paper investigates whether and how deposits in public vis-a-vis in private banks affect economic growth. It uses the power-ARCH framework with annual time series for Brazil from 1870 to 2018. There are three main findings: (a) the indirect impact of domestic financial development on economic growth is negative, whereas that of international financial development is positive, (b) the direct short-run effect of public and private banks is negative, while only for the latter does the positive direct long-run effect dominate, and (c) the indirect and direct short-run effect of public ownership banks is greater in size than that of private ownership banks.

Keywords: Brazil; Direct short- and long-run effects; Economic growth; Financial development; Indirect impact; Private and public ownership (search for similar items in EconPapers)
JEL-codes: C14 D72 E23 O40 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10479-024-05924-7

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