scholarly journals Financial development and prehistoric geographical isolation: global evidence

2017 ◽  
Vol 24 (3) ◽  
pp. 283-306 ◽  
Author(s):  
Oasis Kodila-Tedika ◽  
Simplice A. Asongu ◽  
Matthias Cinyabuguma ◽  
Vanessa S. Tchamyou
Keyword(s):  
Financial Development ◽  
Air Transportation ◽  
Geographical Isolation ◽  
Financial Intermediary ◽  
Stock Market Development ◽  
Information Sets ◽  
Country Differences ◽  
Cross Country ◽  
The Relationship ◽  
Global Evidence

Using cross-country differences in the degree of isolation before the advent of technologies in sea and air transportation, we assess the relationship between geographical isolation and financial development across the globe. We find that prehistoric geographical isolation has been beneficial to development because it has contributed to contemporary cross-country differences in financial intermediary development. The relationship is robust to alternative samples, different estimation techniques, outliers and varying conditioning information sets. The established positive relationship between geographical isolation and financial intermediary development does not significantly extend to stock market development.

scholarly journals Finance and Development: A Tale of Two Sectors

2011 ◽  
Vol 101 (5) ◽  
pp. 1964-2002 ◽  
Author(s):  
Francisco J Buera ◽  
Joseph P Kaboski ◽  
Yongseok Shin
Keyword(s):  
Quantitative Analysis ◽  
Total Factor Productivity ◽  
Financial Frictions ◽  
Substantial Part ◽  
Factor Productivity ◽  
Country Differences ◽  
Cross Country ◽  
Relative Productivity ◽  
The Relationship ◽  
Two Sectors

We develop a quantitative framework to explain the relationship between aggregate/sector-level total factor productivity (TFP) and financial development across countries. Financial frictions distort the allocation of capital and entrepreneurial talent across production units, adversely affecting measured productivity. In our model, sectors with larger scales of operation (e.g., manufacturing) have more financing needs, and are hence disproportionately vulnerable to financial frictions. Our quantitative analysis shows that financial frictions account for a substantial part of the observed cross-country differences in output per worker, aggregate TFP, sector-level relative productivity, and capital-to-output ratios. (JEL E23, E44, O41, O47)

scholarly journals Filling the Gap

2020 ◽  
Vol 20 (150) ◽  
Author(s):  
Majid Bazarbash ◽  
Kimberly Beaton
Keyword(s):  
Financial Development ◽  
Low Income ◽  
Low Income Countries ◽  
Financial Efficiency ◽  
Financial Depth ◽  
Consumer Segment ◽  
Cross Country ◽  
Credit Gap ◽  
The Relationship

Can fintech credit fill the credit gap in the consumer and business segments? There are few cross-country studies that explore this question. Focusing on marketplace lending, an important part of fintech credit, we use data for 109 countries from 2015 to 2017 to study the relationship between fintech credit to businesses and consumers and various aspects of financial development. Marketplace lending to consumers grows in countries where financial depth declines highlighting the role of fintech credit in filling the credit gap by traditional lenders. This result is particularly strong in low-income countries. In the business segment, marketplace lending expands where financial efficiency declines. Our findings show that low-income countries take advantage of the fintech credit opportunity in the consumer segment but face important challenges in the business segment.

Why is Family Firms’ Internationalization Unique? A Meta–Analysis

2017 ◽  
Vol 41 (5) ◽  
pp. 801-831 ◽  
Author(s):  
Jean–Luc Arregle ◽  
Patricio Duran ◽  
Michael A. Hitt ◽  
Marc van Essen
Keyword(s):  
Family Firms ◽  
Meta Analysis ◽  
Clear Understanding ◽  
Minority Shareholders ◽  
Family Control ◽  
Institutional Contexts ◽  
Country Differences ◽  
Cross Country ◽  
The Relationship ◽  
Shed Light

Despite its importance, there is no clear understanding of the uniqueness of family firms’ internationalization. This article sheds new light on this issue with a meta–analysis of 76 studies covering 41 countries. We show that the considerable study and cross–country differences in the relationship between family firm and internationalization are explained by the roles of family control, internationalization types, and home countries’ institutional contexts (i.e., minority shareholders protection and generalized trust of people from other countries). Therefore, we examine the existing divergent results using theories that reconcile some of these mixed findings and shed light on family firms’ specific internationalization challenges.

scholarly journals Deposit Insurance Around the Globe: Where Does It Work?

2002 ◽  
Vol 16 (2) ◽  
pp. 175-195 ◽  
Author(s):  
Aslı Demirgüç ◽  
Edward J Kane
Keyword(s):  
Financial Development ◽  
Deposit Insurance ◽  
Institutional Development ◽  
Market Discipline ◽  
Crisis Resolution ◽  
Private Market ◽  
Banking Stability ◽  
Country Differences ◽  
Low Levels ◽  
Cross Country

Explicit deposit insurance has been spreading rapidly in recent years, even to countries with low levels of financial and institutional development. This paper documents the extent of cross-country differences in deposit insurance design and reviews empirical evidence on how particular design features affect private market discipline, banking stability, financial development and the effectiveness of crisis resolution. This evidence challenges the wisdom of encouraging countries to adopt explicit deposit insurance without first stopping to assess and remedy weaknesses in their informational and supervisory environments.

scholarly journals Financial development and economic growth: panel evidence from BRICS

2019 ◽  
Vol 24 (47) ◽  
pp. 113-126 ◽  
Author(s):  
Biplab Kumar Guru ◽  
Inder Sekhar Yadav
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Financial Development ◽  
Banking Sector ◽  
Market Development ◽  
Content Type ◽  
Stock Market Development ◽  
Development Indicators ◽  
Banking Sector Development ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between financial development and economic growth for five major emerging economies: Brazil, Russia, India, China and South (BRICS) during 1993 to 2014 using banking sector and stock market development indicators. Design/methodology/approach To begin with, the study first examined some of the principal indicators of financial development and macroeconomic variables of the selected economies. Next, using generalized method of moment system estimation (SYS-GMM), the relationship between financial development and growth is investigated. The banking sector development indicators used in the study include size of the financial intermediaries, credit to deposit ratio (CDR) and domestic credit to private sector (CPS), whereas the stock market development indicators are value of shares traded and turnover ratio. Also, some macroeconomic control variables such as inflation, exports and the enrolment in secondary education were used. Findings The examination of the principal indicators of financial development and macroeconomic variables have shown considerable differences between the selected economies. Results from the dynamic one-step SYS-GMM estimates confirm that in presence of turnover ratio, all the selected banking development indicators such as size of financial intermediaries, CDR and CPS are positively significantly determining economic growth. Similarly, in presence of all the selected banking sector development indicators, value of shares traded is found to be positively significantly associated with economic growth. However, the same is not true when turnover ratio is regressed in presence of banking sector variables. Overall, the evidence suggests that banking sector development and stock market development indicators are complementary to each other in stimulating economic growth. Practical implications A positive association between financial development and growth indicates that the policymakers should take necessary measures toward simultaneous development of both banking sector as well as stock market for inducing growth. Originality/value The present paper attempts to examine the relationship between financial development and growth using both banking sector and stock market development indicators which has not been attempted before for BRICS. Also, most of the existing studies are found in case of developed economies. This paper tries to fill this void by studying five major emerging economies.

scholarly journals Innovation in SMEs and Financing Mix

2020 ◽  
Vol 13 (9) ◽  
pp. 206
Author(s):  
Joanna Błach ◽  
Monika Wieczorek-Kosmala ◽  
Joanna Trzęsiok
Keyword(s):  
Innovation Activity ◽  
Parametric Methods ◽  
The European Union ◽  
Ongoing Debate ◽  
Financing Decisions ◽  
Financing Gap ◽  
Country Differences ◽  
Cross Country ◽  
The Cross ◽  
The Relationship

This study addresses the types of innovation activity of SMEs (Small and medium-sized enterprises) in the European Union and its association with financing decisions. The main objective is to capture the cross-country differences in the types of innovation in SMEs and then investigate the relationship between the types of innovations and relevance of a given type of funding. In the empirical examinations, we use the non-parametric methods, due to the nature of the data. We have found out that there are differences in the types of innovation activity of SMEs in the cross-country dimension. We have also confirmed the contingencies between the types of innovations undertaken by SMEs in each cluster of the European countries, which suggests that various types of innovations co-exist. However, we have not found any unified pattern of correlations between the relevance of a given source of financing and a given type of innovation. Our study contributes to the ongoing debate on the different intensity of innovation activity of SMEs, as linked to the problem of the SMEs financing gap as one of the fundamental drivers of innovation.

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