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The Geography of European Cross-Border Banking: The Impact of Cultural and Political Factors

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  • Heuchemer, Sylvia
  • Kleimeier, Stefanie
  • Sander, Harald

    (METEOR)

Abstract

We investigate the determinants of European banking market integration with a focus on the potentially limiting role of cultural and political factors. Employing a unique data set of European cross-border loans and deposits, the study uses various gravity models that are augmented by societal proxies. While trade-theoretic reasoning can explain part of the surge in cross-border banking, we demonstrate that distance and borders still matter in the geography of European cross-border banking. Moreover, we can identify cultural differences and different legal family origin as important barriers to integration.

Suggested Citation

  • Heuchemer, Sylvia & Kleimeier, Stefanie & Sander, Harald, 2008. "The Geography of European Cross-Border Banking: The Impact of Cultural and Political Factors," Research Memorandum 008, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  • Handle: RePEc:unm:umamet:2008008
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    References listed on IDEAS

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    Economics (Jel: A);

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