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Banking Network Multiplier effects on cross-border bank inflows

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  • Yamamoto, Shugo

Abstract

Correlation of cross-border bank inflows has surged since the mid-1990s. Spatial dependence of the dependent variable is well known to engender bias in estimation when applying traditional estimation approaches to sample data of this type. By applying a spatial econometric model with global push factors or country-specific pull factors as intrinsic shocks, we demonstrate that increased cross-border bank inflows of a certain country strongly amplify self-propagation effects on other countries, constituting the Banking Network Multiplier (BNM) effect. Results reveal a strong core–periphery structure, with the BNM distribution concentrated in the United States and a few countries.

Suggested Citation

  • Yamamoto, Shugo, 2020. "Banking Network Multiplier effects on cross-border bank inflows," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 493-507.
  • Handle: RePEc:eee:reveco:v:70:y:2020:i:c:p:493-507
    DOI: 10.1016/j.iref.2020.06.003
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    More about this item

    Keywords

    Banking Network Multiplier effects; Core–periphery; Spatial effect;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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