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Bank Competition, Economic Growth, and Nonlinearity: A Nonparametric Approach

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  • Georg Man

Abstract

type="main" xml:id="sjpe12076-abs-0001"> This article asks empirically the question about potential nonlinearities in the link between bank competition and aggregate economic growth in a cross-section of countries. I employ nonparametric methods, primarily kernel estimation, and several measures of banking competition. The results suggest that while the data show the presence of relevant nonlinearities, the available evidence provides only limited support for nonmonotonicities such as inverted u-shapes, and so contrasts with previous findings obtained using parametric methods. This study corroborates the traditional view, according to which more bank competition fosters growth, with presumed implications for policy.

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  • Georg Man, 2015. "Bank Competition, Economic Growth, and Nonlinearity: A Nonparametric Approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(3), pages 310-324, July.
    • Handle: RePEc:bla:scotjp:v:62:y:2015:i:3:p:310-324
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    1. Jeremy Greenwood & Juan Sanchez & Cheng Wang, 2013. "Quantifying the Impact of Financial Development on Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 194-215, January.

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