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Financial system structure and economic growth: Structure matters

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  • Ergungor, O. Emre

Abstract

This paper investigates how the structure of a financial system--whether it is bank or market-oriented--affects economic growth. In contrast to earlier research, which indicates that the financial system's structure is irrelevant for growth, I find that there is a nonlinear (contingent) relationship between growth and financial structure. Countries that have an inflexible judicial system grow faster when they have a more bank-oriented financial system.

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  • Ergungor, O. Emre, 2008. "Financial system structure and economic growth: Structure matters," International Review of Economics & Finance, Elsevier, vol. 17(2), pages 292-305.
    • Handle: RePEc:eee:reveco:v:17:y:2008:i:2:p:292-305
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