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Convergence of financial systems: Towards an evolutionary perspective

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  • Werner Hölzl

    ()
    (Vienna University of Economics & B.A.)

Abstract

This paper provides an evolutionary perspective on financial systems based on complex systems theory. This perspective is used to organize the discussion about the convergence and non-convergence of financial systems. In recent years the discussion about the relative merits and the efficiency of market- and bank-based financial systems is subject to considerable academic and policy debate throughout the world. Bank- and market-based systems are found to give rise to different economic and corporate dynamics. Based on a notion of financial systems as configuration of complementary elements, it is suggested that the convergence of financial systems is best conceptualized as path dependent process of institutional change. This is illustrated with special reference to the recent developments of convergence of financial systems in Europe. The implication of the evolutionary perspective on financial systems is that neither theories using a simple evolutionary argument of survival of the fittest nor theories related to a institutional ossification perspective can provide much guidance for analyzing the transformations of financial systems. A multilevel institutional analysis which takes the interdependencies between national and firm-level institutions explicitly into account is required.

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Bibliographic Info

Paper provided by Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number geewp31.

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Date of creation: Aug 2003
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Handle: RePEc:wiw:wiwgee:geewp31

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Keywords: Institutional convergence; financial system; NK model; systems competition; path dependency; corporate governance;

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References

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Citations

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Cited by:
  1. Nedelchev, Miroslav, 2012. "Корпоративно Управление На Финансови Посредници: Конвергенция И Дивергенция
    [Corporate Governance Of Financial Intermediaries: Con
    ," MPRA Paper 52268, University Library of Munich, Germany.
  2. Giofré, Maela, 2013. "Investor protection rights and foreign investment," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 506-526.
  3. repec:hal:wpaper:hal-00786664 is not listed on IDEAS
  4. Bruno, Giuseppe & De Bonis, Riccardo & Silvestrini, Andrea, 2012. "Do financial systems converge? New evidence from financial assets in OECD countries," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 141-155.
  5. Asongu Simplice, 2012. "African Stock Market Performance Dynamics: A Multidimensional Convergence Assessment," Working Papers 12/004, African Governance and Development Institute..
  6. Jackie Krafft & Yiping Qu & Francesco Quatraro & Jacques-Laurent Ravix, 2013. "Corporate governance, value and performance of firms: New empirical results on convergence from a large international database," Working Papers halshs-00786763, HAL.
  7. Asongu Simplice, 2012. "African Financial Development Dynamics: Big Time Convergence," Working Papers 12/003, African Governance and Development Institute..
  8. Nedelchev, Miroslav, 2012. "Corporate governance of financial intermediaries: convergence and divergence," MPRA Paper 53939, University Library of Munich, Germany.

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