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How does financial market structure affect the impact of a banking crisis?

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  • Bijlsma, Michiel
  • Dubovik, Andrei
  • Straathof, Bas

Abstract

We find a more negative impact of a financial crisis on growth of industrial sectors in developed countries that are more dependent on external finance, also when controlling for omitted variables by including country–time, industry–time and country–industry fixed effects. This differential effect is stronger in countries with a more leveraged financial sector, while it is unaffected by the depth of financial markets.

Suggested Citation

  • Bijlsma, Michiel & Dubovik, Andrei & Straathof, Bas, 2015. "How does financial market structure affect the impact of a banking crisis?," Economics Letters, Elsevier, vol. 135(C), pages 144-147.
    • Handle: RePEc:eee:ecolet:v:135:y:2015:i:c:p:144-147
    DOI: 10.1016/j.econlet.2015.08.019
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial crisis; Industrial growth; Credit crunch; Leverage;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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