Bank-Based or Market-Based Financial Systems: Which is Better?

Ross Levine ()

No 442, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: For over a century, economists and policy makers have debated the relative merits of bank-based versus market-based financial systems. Recent research, however, argues that classifying countries as bank-based or market is not a very fruitful way to distinguish financial systems. This paper represents the first broad, cross-country examination of which view of financial structure is more consistent with the data. The results indicate that although overall financial development is robustly linked with economic growth, there is no support for either the bank-based or market-based view.

Keywords: Banking and Finance; Banks; Stock Markets; Law; Economic Growth (search for similar items in EconPapers)
JEL-codes: G0 K2 O4 (search for similar items in EconPapers)
Pages: pages
Date: 2002-02-01
New Economics Papers: this item is included in nep-fmk, nep-law and nep-pke
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Citations: View citations in EconPapers (625)

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Related works:
Journal Article: Bank-Based or Market-Based Financial Systems: Which Is Better? (2002)
Working Paper: Bank-Based or Market-Based Financial Systems: Which is Better? (2002)
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