Financial Sector Competition, Services Trade, and Growth

24 Pages Posted: 13 Nov 2002

See all articles by Felix Eschenbach

Felix Eschenbach

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

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

Multiple version iconThere are 2 versions of this paper

Date Written: October 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 the 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, services trade, services trade and growth, services trade and imperfect competition, banking competition

JEL Classification: F13, F40, F43, G15

Suggested Citation

Eschenbach, Felix and Francois, Joseph F, Financial Sector Competition, Services Trade, and Growth (October 2002). CEPR Discussion Paper No. 3573. Available at SSRN: https://ssrn.com/abstract=348561

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)

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)

Register to save articles to
your library

Register

Paper statistics

Downloads
27
Abstract Views
1,422
PlumX Metrics