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The determinants of international financial integration revisited: the role of networks and geographic neutrality

Iván Arribas (), Francisco Perez () and Emili Tortosa-Ausina ()

MPRA Paper from University Library of Munich, Germany

Abstract: Over the last two decades, the degree of international financial integration has increased substantially, becoming an important area of research for many financial economists. This paper explores the determinants of the asymmetries in the international integration of banking systems. We consider an approach based on both network analysis and the concept of geographic neutrality. Our analysis focuses on the banking systems of 18 advanced economies from 1999 to 2005. Results indicate that banking integration should be assessed from the perspective of both inflows and outflows, given that they show different patterns for different countries. Using standard techniques, our results reinforce previous findings by the literature—especially the remarkable role of both geographic distance and trade integration. Nonparametric techniques reveal that the effect of the covariates on banking integration is not constant over the conditional distribution which (in practical terms) implies that the sign of the relationship varies across countries.

Keywords: banking integration; geographic neutrality; network analysis; nonparametric regression (search for similar items in EconPapers)
JEL-codes: F15 F21 Z13 F36 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-net
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Related works:
Journal Article: The Determinants of International Financial Integration Revisited: The Role of Networks and Geographic Neutrality (2010) Downloads
Working Paper: The Determinants of International Financial Integration Revisited: The Role of Networks and Geographic Neutrality (2009) Downloads
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