Financial Sector Competition, International Trade in Financial Services, and Economic Growth

Joseph Francois and Felix Eschenbach

No 331429, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: We explore dynamic linkages between financial/banking sector openness, financial sector competition, and growth. We first develop a model highlighting links between long-run economic performance and services trade, through scale economies and market and cost structures in the financial services sector. This is followed by an econometric exercise based on data for 130 countries for the 1990s. Our results point to a strong positive relationship between financial sector competition /performance and financial sector openness (meaning foreign bank access to domestic markets), and between growth and financial sector competition/performance. They also point to the presence of scale economies in the sector.

Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
Pages: 25
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331429

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