Financial dependence, banking sector competition, and economic growth

Stijn Claessens () and Luc Laeven

No 3481, Policy Research Working Paper Series from The World Bank

Abstract: The relationships among competition in the financial sector, access of firms to external financing, and associated economic growth are ambiguous in theory. Moreover, measuring competition in the financial sector can be complex. In this paper the authors first estimate for 16 countries a measure of banking system competition based on industrial organization theory. They then relate this competition measure to growth of industries and find that greater competition in countries'banking systems allows financially dependent industries to grow faster. These results are robust under a variety of tests. Their results suggest that the degree of competition is an important aspect of financial sector functioning.

Keywords: Economic Theory&Research; Banks&Banking Reform; Payment Systems&Infrastructure; Labor Policies; International Terrorism&Counterterrorism; Economic Theory&Research; Banks&Banking Reform; Environmental Economics&Policies; Health Economics&Finance; International Terrorism&Counterterrorism (search for similar items in EconPapers)
Date: 2005-01-01
New Economics Papers: this item is included in nep-dev and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (195)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/wps3481.pdf (application/pdf)

Related works:
Journal Article: Financial Dependence, Banking Sector Competition, and Economic Growth (2005)
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:wbk:wbrwps:3481

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().