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The finance-growth nexus and public-private ownership of banks in Brazil since 1870

Author

Listed:
  • Nauro Campos

    (University College London
    IZA Bonn and ETH Zurich)

  • Menelaos Karanasos

    (Brunel University London)

  • Panagiotis Koutroumpis

    (University of Sussex)

  • Ekaterina Glebkina

    (Brunel University London)

Abstract

How does finance affect economic growth? And does ownership matter? This paper investigates whether and how deposits in public vis-a-vis in private banks affect economic growth. It uses the power-ARCH framework with annual time series for Brazil from 1870 to 2018. There are three main findings: (a) the indirect impact of domestic financial development on economic growth is negative, whereas that of international financial development is positive, (b) the direct short-run effect of public and private banks is negative, while only for the latter does the positive direct long-run effect dominate, and (c) the indirect and direct short-run effect of public ownership banks is greater in size than that of private ownership banks.

Suggested Citation

  • Nauro Campos & Menelaos Karanasos & Panagiotis Koutroumpis & Ekaterina Glebkina, 2025. "The finance-growth nexus and public-private ownership of banks in Brazil since 1870," Annals of Operations Research, Springer, vol. 352(3), pages 835-858, September.
    • Handle: RePEc:spr:annopr:v:352:y:2025:i:3:d:10.1007_s10479-024-05924-7
    DOI: 10.1007/s10479-024-05924-7
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    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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