Is Government Ownership of Banks Really Harmful to Growth?
AbstractWe show that previous results suggesting that government ownership of banks is associated with lower long run growth rates are not robust to adding more “fundamental” determinants of economic growth. We also present new cross-country evidence for 1995- 2007 which suggests that, if anything, government ownership of banks has been robustly associated with higher long run growth rates. While acknowledging that cross-country results need not imply causality, we nevertheless provide a conceptual framework, drawing on the global financial crisis of 2008-09, which explains why under certain circumstances government owned banks could be more conducive to economic growth than privately-owned banks.
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Bibliographic InfoPaper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 09/11.
Date of creation: May 2009
Date of revision: Dec 2009
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Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
Phone: +44 (0)116 252 2887
Fax: +44 (0)116 252 2908
Web page: http://www2.le.ac.uk/departments/economics
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Other versions of this item:
- Svetlana Andrianova & Panicos Demetriades & Anja Shortland, 2010. "Is Government Ownership of Banks Really Harmful to Growth?," Discussion Papers of DIW Berlin 987, DIW Berlin, German Institute for Economic Research.
- Svetlana Andrianova & Panicos Demetriades & Anja Shortland, 2009. "Is Government Ownership of Banks Really Harmful to Growth?," CEDI Discussion Paper Series, Centre for Economic Development and Institutions(CEDI), Brunel University 09-05, Centre for Economic Development and Institutions(CEDI), Brunel University.
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-16 (All new papers)
- NEP-BAN-2009-05-16 (Banking)
- NEP-FDG-2009-05-16 (Financial Development & Growth)
- NEP-PKE-2009-05-16 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Delano Villanueva & Abbas Mirakhor, 1990. "Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 37(3), pages 509-536, September.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Regulation vs nationalization
by chris dillow in Stumbling and Mumbling on 2009-07-08 13:13:51
- What do nationalized banks do?
by chris dillow in Stumbling and Mumbling on 2010-05-28 12:47:51
- Xiao, Sheng & Zhao, Shan, 2012. "Financial development, government ownership of banks and firm innovation," Journal of International Money and Finance, Elsevier, Elsevier, vol. 31(4), pages 880-906.
- Andrei Vernikov, 2011. "Government Banking in Russia: Magnitude and New Features," IWH Discussion Papers, Halle Institute for Economic Research 13, Halle Institute for Economic Research.
- Tobias Körner & Isabel Schnabel, 2010.
"Public Ownership of Banks and Economic Growth – The Role of Heterogeneity,"
Working Paper Series of the Max Planck Institute for Research on Collective Goods, Max Planck Institute for Research on Collective Goods
2010_41, Max Planck Institute for Research on Collective Goods.
- Körner, Tobias & Schnabel, Isabel, 2010. "Public Ownership of Banks and Economic Growth - The Role of Heterogeneity," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8138, C.E.P.R. Discussion Papers.
- Gelb, Alan & Tordo, Silvana & Halland, Havard & Arfaa, Noora & Smith, Gregory, 2014. "Sovereign wealth funds and long-term development finance : risks and opportunities," Policy Research Working Paper Series 6776, The World Bank.
- Jesus Gonzalez-Garcia & Francesco Grigoli, 2013. "State-Owned Banks and Fiscal Discipline," IMF Working Papers 13/206, International Monetary Fund.
- Brei, Michael & Schclarek, Alfredo, 2013. "Public bank lending in times of crisis," Journal of Financial Stability, Elsevier, Elsevier, vol. 9(4), pages 820-830.
- Gutierrez, Eva & Rudolph, Heinz P. & Homa, Theodore & Beneit, Enrique Blanco, 2011. "Development banks : role and mechanisms to increase their efficiency," Policy Research Working Paper Series 5729, The World Bank.
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