IDEAS home Printed from https://ideas.repec.org/p/nfi/nfiwps/2007-wp-04.html
   My bibliography  Save this paper

Are Banks and Stock Markets Complements or Substitutes?

Author

Listed:
  • Malay K. Dey

Abstract

We examine the determinants of stock market and bank liquidity in an economy in a SUR framework in which stock market turnover and available bank credit denoting access to long and short term capital respectively are interdependent and the errors are correlated. The SUR results suggest that available bank credit and stock market turnover are inversely related to each other, confirming their substitutability in terms of external financing needed by corporations. Other significant common factors for stock market turnover and available bank credit include stock market growth, legal origin, and whether the stock market is developed or emerging, an indicator of path dependence. These common determinants of stock market and bank liquidity are generally stable over time.

Suggested Citation

  • Malay K. Dey, 2007. "Are Banks and Stock Markets Complements or Substitutes?," NFI Working Papers 2007-WP-04, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfiwps:2007-wp-04
    as

    Download full text from publisher

    File URL: http://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/2007-WP-04_Dey.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sheilla Nyasha & Nicholas M. Odhiambo, 2017. "Are Banks and Stock Markets Complements Or Substitutes? Empirical Evidence from Three Countries," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 15(1 (Spring), pages 81-101.
    2. Abdorasoul Sadeghi & Hussein Marzban & Ali Hussein Samadi & Karim Azarbaiejani & Parviz Rostamzadeh, 2022. "Financial intermediaries and speculation in the foreign exchange market: the role of monetary policy in Iran’s economy," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-26, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nfi:nfiwps:2007-wp-04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ray Thomas (email available below). General contact details of provider: https://edirc.repec.org/data/nfinsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.