Financial Integration and Growth - Is Emerging Europe Different?
52 Pages Posted: 6 Dec 2010
Date Written: December 2010
Abstract
Using industry-level data, this paper shows that the European transition region benefited much more strongly from financial integration in terms of economic growth than other developing countries in the years preceding the current crisis. We analyze several factors that may explain this finding: financial development, institutional quality, trade integration, political integration, and financial integration itself. The explanation that stands out is political integration. Within the group of transition countries, the effect of financial integration is strongest for countries that are politically closest to the EU. This suggests that political and financial integration are complementary and that political integration can considerably increase the benefits of financial integration.
Keywords: Economic growth, European transition economies, Financial integration, Parent banking, Political integration
JEL Classification: F32, F36, G21, O16
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Financial Globalization: A Reappraisal
By M. Ayhan Kose, Eswar S. Prasad, ...
-
Financial Globalization: A Reappraisal
By M. Ayhan Kose, Eswar S. Prasad, ...
-
Financial Globalization: A Reappraisal
By M. Ayhan Kose, Eswar S. Prasad, ...
-
Economic Effects and Structural Determinants of Capital Controls
-
What Matters for Financial Development? Capital Controls, Institutions, and Interactions
By Menzie David Chinn and Hiro Ito
-
What Matters for Financial Development? Capital Controls, Institutions, and Interactions
By Menzie David Chinn and Hiro Ito
-
Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization
-
Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization
-
Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization
Financial Integration and Growth - Is Emerging Europe Different?
This is a CEPR Discussion Paper. CEPR charges a fee of $8.00 for this paper.
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
