Financial System Structure and Economic Development: Structure Matters
FRB of Cleveland Working Paper No. 03-05
35 Pages Posted: 1 Aug 2003
Date Written: July 14, 2003
This paper investigates how the structure of a financial system - whether it is bank or market oriented - affects economic growth. In contrast to earlier research, which indicates that the financial system's structure is irrelevant for growth, I find that countries grow faster when they have a flexible judicial system and more market-oriented financial systems.
Keywords: economic growth, judicial flexibility, banks, stock market, financial development
JEL Classification: G0, K2, O4
Suggested Citation: Suggested Citation