Measuring complementarity in financial systems

Adeline Saillard () and Thomas Url ()
Additional contact information
Adeline Saillard: Centre d'Economie de la Sorbonne - Paris School of Economics, https://centredeconomiesorbonne.cnrs.fr
Thomas Url: WIFO - Austrian Institute of Economic Research

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: The distinction between bank and market based economies has a long tradition in applied macroeconomics. The two types differ not only in the level of financial activity channeled through the stock market and private banking, but also in their institutional frameworks. We challenge this traditional distinction between the two types of financial architecture. We develop an index that accounts for complementarity between financial markets and banking systems that has been hypothesized by Sylla (1998) and Song and Thakor (2010). The theoretical foundation of our empirical approach is the general equilibrium framework by Freixas and Rochet (1997). We validate the proposed index and the underlying theory of complementary using a random coefficient and a Generalized estimating equations (GEE)

Keywords: Bank-based; market-based; complementarity; efficiency; financial structure (search for similar items in EconPapers)
JEL-codes: E42 G20 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2012-06
New Economics Papers: this item is included in nep-ban, nep-cba and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://mse.univ-paris1.fr/pub/mse/CES2012/12039.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:12039

Access Statistics for this paper

More papers in Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().