IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/2948.html
   My bibliography  Save this paper

The impact of contractual savings institutions on securities markets

Author

Listed:
  • Impavido, Gregorio
  • Musalem, Alberto R.
  • Tressel, Thierry

Abstract

The authors assess empirically the impact of contractual savings institutions portfolios (pension funds and life insurance companies) on securities markets, for example, depth and liquidity in the domestic stock market, and depth in the domestic bond market. They discuss how the institutionalization of savings can modify financial markets through the lengthening of securities'maturities. The results are the following: 1) An increase in assets of contractual savings institutions relative to domestic financial assets has a positive impact on the depth of stock and bond markets on average. 2) The impact on stock market depth and liquidity is nonlinear: it is stronger in countries where corporate information is more transparent. 3) There is evidence of a significant heterogeneity among countries: contractual savings have a stronger impact on securities markets in countries where the financial system is market based, pension fund contributions are mandatory, and international transactions in securities are lower. 4) The authors do not find that the impact of contractual savings institutions on securities markets is explained by the overall level of development, education, demographic structure or the legal environment.

Suggested Citation

  • Impavido, Gregorio & Musalem, Alberto R. & Tressel, Thierry, 2003. "The impact of contractual savings institutions on securities markets," Policy Research Working Paper Series 2948, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2948
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/02/07/000094946_03013004074322/Rendered/PDF/multi0page.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
    2. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    3. Catalan, Mario & Impavido, Gregorio & Musalem, Alberto R., 2000. "Contractual savings or stock market development - Which leads?," Policy Research Working Paper Series 2421, The World Bank.
    4. Jeannine Bailliu & Helmut Reisen, 1998. "Do funded pensions contribute to higher aggregate savings? A cross-country analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(4), pages 692-711, December.
    5. James M. Poterba & Andrew A. Samwick, 1995. "Stock Ownership Patterns, Stock Market Fluctuations, and Consumption," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(2), pages 295-372.
    6. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    7. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    8. Impavido, Gregorio & Musalem, Alberto R. & Vittas, Dimitri, 2002. "Contractual savings in countries with a small financial sector," Policy Research Working Paper Series 2841, The World Bank.
    9. Boyd, John H. & Levine, Ross & Smith, Bruce D., 2001. "The impact of inflation on financial sector performance," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 221-248, April.
    10. Impavido, Gregorio & Musalem, Alberto R., 2000. "Contractual savings, stock, and asset markets," Policy Research Working Paper Series 2490, The World Bank.
    11. Demirguc-Kunt, Asli & Levine, Ross, 1999. "Bank-based and market-based financial systems - cross-country comparisons," Policy Research Working Paper Series 2143, The World Bank.
    12. Impavido, Gregorio & Musalem, Alberto R. & Tressel, Thierry, 2001. "Contractual savings institutions and banks'stability and efficiency," Policy Research Working Paper Series 2751, The World Bank.
    13. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Relwende Sawadogo & Samuel Guérineau, 2015. "Does Insurance Development Affect the Financial Markets in developing countries?," Working Papers halshs-01178840, HAL.
    2. W.N.W Azman‐Saini & Peter Smith, 2011. "Finance And Growth: New Evidence On The Role Of Insurance," South African Journal of Economics, Economic Society of South Africa, vol. 79(2), pages 111-127, June.
    3. Bonfiglioli, Alessandra, 2008. "Financial integration, productivity and capital accumulation," Journal of International Economics, Elsevier, vol. 76(2), pages 337-355, December.
    4. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    5. Jean-Pierre Allegret & Sana Azzabi, 2014. "Intégration financière internationale et croissance économique dans les pays émergents et en développement : le canal du développement financier," Revue d’économie du développement, De Boeck Université, vol. 22(3), pages 27-68.
    6. Thumrongvit, Patara & Kim, Yoonbai & Pyun, Chong Soo, 2013. "Linking the missing market: The effect of bond markets on economic growth," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 529-541.
    7. Zouheir Abida & Imen Mohamed Sghaier & Nahed Zghidi, 2015. "Financial Development and Economic Growth: Evidence from North African Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 17-33, April.
    8. Dombi, Ákos & Grigoriadis, Theocharis, 2020. "State history and the finance-growth nexus: Evidence from transition economies," Economic Systems, Elsevier, vol. 44(1).
    9. Yongfu Huang & Jonathan Temple, 2005. "Does external trade promote financial development?," Bristol Economics Discussion Papers 05/575, School of Economics, University of Bristol, UK.
    10. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    11. Allen, Franklin & Bartiloro, Laura & Gu, Xian & Kowalewski, Oskar, 2018. "Does economic structure determine financial structure?," Journal of International Economics, Elsevier, vol. 114(C), pages 389-409.
    12. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    13. Bojan Srbinoski & Klime Poposki & Patricia H. Born & Valter Lazzari, 2021. "Life insurance demand and borrowing constraints," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 24(1), pages 37-69, March.
    14. Thorsten Beck, 2009. "The Econometrics of Finance and Growth," Palgrave Macmillan Books, in: Terence C. Mills & Kerry Patterson (ed.), Palgrave Handbook of Econometrics, chapter 25, pages 1180-1209, Palgrave Macmillan.
    15. Comlanvi Jude EGGOH, 2009. "Développement financier, instabilité financière et croissance économique : un réexamen de la relation," LEO Working Papers / DR LEO 444, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    16. Goddard, John & Liu, Hong & Molyneux, Philip & Wilson, John O.S., 2011. "The persistence of bank profit," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2881-2890, November.
    17. Zandberg, Eelco & Spierdijk, Laura, 2013. "Funding of pensions and economic growth: are they really related?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 12(2), pages 151-167, April.
    18. M. Tariq Majeed & Ayesha Noreen, 2018. "Financial Development and Output Volatility: A Cross-Sectional Panel Data Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 23(1), pages 97-141, Jan-June.
    19. Du, Brian & Serrano, Alejandro & Vianna, Andre, 2018. "Institutional development and foreign banks in Chile," International Review of Financial Analysis, Elsevier, vol. 58(C), pages 166-178.
    20. Bello K. Ajide, 2020. "Fragmentation and financial development in Sub-Saharan Africa Countries: the case of diversity debit versus diversity dividend theses," Economic Change and Restructuring, Springer, vol. 53(3), pages 379-428, August.

    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:wbk:wbrwps:2948. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.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.