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Financial Structure and Economic Growth: A Non-Technical Survey

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  • Veronika Dolar
  • Césaire Meh

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Paper provided by Bank of Canada in its series Working Papers with number 02-24.

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Length: 43 pages Abstract: There is a large body of literature that studies the relationship between financial structure (that is, the degree to which the financial system is either market- or intermediary-based) and long-run economic growth. This paper gives a non-technical survey of that literature designed for a general audience. The literature suggests that financial structure does not explain differential growth rates across countries. What matters for growth is the overall level and quality of financial services. Therefore, the best way to examine the connection between financial structure and growth is not to study how markets and intermediaries can substitute for each other, but rather how markets and intermediaries complement one another.
Date of creation: 2002
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Handle: RePEc:bca:bocawp:02-24

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Related research

Keywords: Development economics; Economic models; Financial institutions; Financial markets; Financial services;

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Cited by:
  1. Moayedi, Vafa & Aminfard, Matin, 2011. "The Impact of Policy Shocks on Financial Structure: Empirical Results from Japan," MPRA Paper 39185, University Library of Munich, Germany.
  2. Ramdane Djoudad & Jack Selody & Carolyn Wilkins, 2005. "Does Financial Structure Matter for the Information Content of Financial Indicators?," Working Papers 05-33, Bank of Canada.
  3. Koetter, Michael & Wedow, Michael, 2005. "Finance and growth in a bank-based economy: is it quantity or quality that matters?," Discussion Paper Series 2: Banking and Financial Studies 2006,02, Deutsche Bundesbank, Research Centre.
  4. Karine Gobert & Patrick González & Michel Poitevin & Alexandra Lai, 2002. "Bank Value and Financial Fragility," CIRANO Project Reports 2002rp-07, CIRANO.
  5. Ram Sharan Kharel Ph.D. & Dilli Ram Pokhrel Ph.D., 2012. "Does Nepal's Financial Structure Matter for Economic Growth?," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 24(2), pages 31-46, October.
  6. Meh, Césaire A. & Quadrini, Vincenzo, 2004. "Endogenous Market Incompleteness with Investment Risks," CEPR Discussion Papers 4807, C.E.P.R. Discussion Papers.
  7. Miguel SARMIENTOÕ & Andrés CEPEDA & Hernando MUTIS & Juan F. PÉREZ, 2013. "Nueva Evidencia sobre la Eficiencia de la Banca," ARCHIVOS DE ECONOMÍA 010705, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
  8. Ram Sharan Kharel Ph.D. & Dilli Ram Pokhrel Ph.D., 2012. "Does Nepal's Financial Structure Matter for Economic Growth?," NRB working Paper 10/2012, Nepal Rastra Bank, Research Department.
  9. LG. Deidda & B. Fattouh, 2005. "Banks, Financial Markets and Growth," Working Paper CRENoS 200511, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  10. Jason Allen & Walter Engert & Ying Liu, 2006. "Are Canadian Banks Efficient? A Canada--U.S. Comparison," Working Papers 06-33, Bank of Canada.
  11. Carol Ann Northcott, 2004. "Competition in Banking: A Review of the Literature," Working Papers 04-24, Bank of Canada.
  12. Césaire A. Meh & Vincenzo Quadrini, 2004. "Uninsurable Investment Risks," Working Papers 04-29, Bank of Canada.

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