Financial Integration and Growth - Is Emerging Europe Different?
Isabel Schnabel () and
Jeromin Zettelmeyer ()
No 8137, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Using industry-level data, this paper shows that the European transition region benefited much more strongly from financial integration in terms of economic growth than other developing countries in the years preceding the current crisis. We analyze several factors that may explain this finding: financial development, institutional quality, trade integration, political integration, and financial integration itself. The explanation that stands out is political integration. Within the group of transition countries, the effect of financial integration is strongest for countries that are politically closest to the EU. This suggests that political and financial integration are complementary and that political integration can considerably increase the benefits of financial integration.
Keywords: Economic growth; European transition economies; Financial integration; Parent banking; Political integration (search for similar items in EconPapers)
JEL-codes: F32 F36 G21 O16 (search for similar items in EconPapers)
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Journal Article: Financial integration and growth — Why is Emerging Europe different? (2013)
Working Paper: Financial Integration and Growth -Is Emerging Europe Different? (2010)
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