Financial Dependence, Banking Sector Competition, and Economic Growth
By Stijn Claessens, Luc Laeven. 2005
435 citations recorded by the source corpus.
The relationships among competition in the financial sector, access of firms to external financing, and associated economic growth are ambiguous in theory. Moreover, measuring competition in the financial sector can be complex. In this paper the authors first estimate for 16 countries a measure of banking system competition based on industrial organization theory. They then relate this competition measure to growth of industries and find that greater competition in countries'banking systems allows financially dependent industries to grow faster. These results are robust under a variety of tests. Their results suggest that the degree of competition is an important aspect of financial sector functioning.
View Paper: https://www.semanticscholar.org/paper/c77adb34077aef0a6dc9088c257d0d15d1a5aaf0
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Citations in the corpus
- Cross-Country Comparisons of Competition and Pricing Power in (2006, methodology): “2000; Claessens and Laeven, 2004 and 2005; among others), the H-statistics are derived from a revenue function estimated separately for each country.”
- Banking competition, financial dependence and economic growth (2006, methodology): “As in other studies (Claessens and Laeven, 2005; Carbó et al., 2006), the results are sensitive to the indicator of banking competition used (structural vs.”
- Financial Development and Economic Growth: New Evidence From Panel Data (2007, background): “Furthermore, Claessens nd Laeven (2005) related banking competition and industrial rowth and found that the higher the competition among banks, he faster the growth of finance-dependent industries, suggestng also that higher financial development precedes economic rowth.”
- Small Banks and Local Economic Development (2015, background): “Driven by market power (Claessens and Laeven, 2004, 2005; Carbó-Valverde et al., 2009; Koetter et al., 2012), scale economy (Berger, 1995; DeYoung et al., 2009; DeYoung, 2012; Wheelock and Wilson, 2012) and too-big-to-fail motives (Mishkin, 2006; Kane, 2000; Stolz and Wedow, 2010; Laeven and…”
- Banking stability, competition, and economic volatility (2016, background): “Cetorelli and Gambera (2001) and Claessens and Laeven (2005) show that the lower the competition in the banking market, the higher the credit provided to firms that are more dependent on external finance.”