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Bank Competition and International Financial Integration: Evidence using a new index

Gurnain Pasricha ()

No 37, FIW Working Paper series from FIW

Abstract: In the debate on the benefits of international financial integration, recent literature has emphasized the development of domestic markets as a precondition. This paper offers an alternative view. Lack of competition in domestic financial systems may prevent countries from reaping the benefits of international integration simply because it prevents them from being integrated in a meaningful way - that of price equalization. A new index of de-facto financial integration is used to explore this question and confirms a strong link. The level of de-jure controls, volatility and institutions matter for price integration but their importance differs between developed and developing countries.

Keywords: Financial Integration Index; Covered Interest Parity; Threshold Autoregressive Models; Bank Competitiveness (search for similar items in EconPapers)
JEL-codes: F32 G15 G21 (search for similar items in EconPapers)
Pages: 37
Date: 2009-11
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Related works:
Working Paper: Bank Competition and International Financial Integration: Evidence Using a New Index (2010) Downloads
Working Paper: Bank Competition and International Financial Integration:Evidence Using a New Index (2009) Downloads
Working Paper: Bank Competition and International Financial Integration: Evidence using a new Index (2009) Downloads
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