Financial Sector Competition, Services Trade, and Growth

Tinbergen Institute Working Paper No. 2002-089/2

26 Pages Posted: 7 Nov 2002

See all articles by Joseph F. Francois

Joseph F. Francois

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR); Vienna Institute of International Economic Studies (WIIW); University of Adelaide - School of Economics

Felix Eschenbach

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2002

Abstract

We explore dynamic linkages between financial/banking sector openness, financial sector competition, and growth. We first develop an analytical model, highlighting links between long-run economic performance and services trade, through scale economies and market and cost structures in the financial services sector. This is followed by an econometric exercise based on data for 130 countries for the 1990s. Our results point to a strong positive relationship between financial sector competition/performance and financial sector openness (meaning foreign bank access to domestic markets), and between growth and financial sector competition/performance. They also point to the presence of scale economies in the sector.

Keywords: Financial services trade, financial sector openness, service trade and imperfect competition, trade in services and growth, banking and growth

JEL Classification: F40, F13, F43, G15

Suggested Citation

Francois, Joseph F and Eschenbach, Felix, Financial Sector Competition, Services Trade, and Growth (September 2002). Tinbergen Institute Working Paper No. 2002-089/2. Available at SSRN: https://ssrn.com/abstract=335440 or http://dx.doi.org/10.2139/ssrn.335440

Joseph F Francois (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, CH-3001
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Vienna Institute of International Economic Studies (WIIW) ( email )

Oppolzergasse 6
A-1010 Vienna
Austria

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia
+61 8 8303 5540 (Phone)
+61 8 8223 1460 (Fax)

Felix Eschenbach

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burgemeester Oudlaan 50
3062 PA Rotterdam, NL 3062 PA
Netherlands
+31 10 408 8924 (Phone)
+31 10 408 9146 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
369
Abstract Views
1,788
rank
73,189
PlumX Metrics