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Measuring complementarity in financial systems


  • Adeline Saillard

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Thomas Url

    () (WIFO - Austrian Institute of Economic Research)


The distinction between bank and market based economies has a long tradition in applied macroeconomics. The two types differ not only in the level of financial activity channeled through the stock market and private banking, but also in their institutional frameworks. We challenge this traditional distinction between the two types of financial architecture. We develop an index that accounts for complementarity between financial markets and banking systems that has been hypothesized by Sylla (1998) and Song and Thakor (2010). The theoretical foundation of our empirical approach is the general equilibrium framework by Freixas and Rochet (1997). We validate the proposed index and the underlying theory of complementary using a random coefficient and a Generalized estimating equations (GEE).

Suggested Citation

  • Adeline Saillard & Thomas Url, 2012. "Measuring complementarity in financial systems," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00716936, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00716936
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    References listed on IDEAS

    1. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, vol. 98(3), pages 1128-1144, June.
    2. Frederick Van der Ploeg & Cees A. Withagen, 2011. "Too Little Oil, Too Much Coal: Optimal Carbon Tax and when to Phase in Oil, Coal and Renewables," CESifo Working Paper Series 3526, CESifo Group Munich.
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    More about this item


    financial structure.; efficiency; complementarity; financial structure; Bank-based; market-based; efficacité.; complémentarité; Structure financière;

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