Two faces of financial systems: provision of services versus shock-smoothing

Makhlouf, Y ORCID: https://orcid.org/0000-0001-7737-3153 and Vinogradov, D, 2021. Two faces of financial systems: provision of services versus shock-smoothing. Journal of International Financial Markets, Institutions and Money, 75: 101456. ISSN 1042-4431

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Abstract

Banks and financial markets contribute to economic growth directly – by providing information, liquidity and other services to investors and borrowers, and indirectly – by dampening the impact of exogenous shocks on growth. Do banks and markets perform equally well in both? Our panel of 44 developing and 29 developed countries in 1975-2017 demonstrates significance of only the service channel in advanced economies: they perform better if they are market-based. In less developed economies financial structure has no direct relevance for growth but offers shock-smoothing advantages through banks; market trading activity makes shocks absorbed faster and transmitted to the real sector quicker.

Item Type:	Journal article
Publication Title:	Journal of International Financial Markets, Institutions and Money
Creators:	Makhlouf, Y. and Vinogradov, D.
Publisher:	Elsevier
Date:	November 2021
Volume:	75
ISSN:	1042-4431
Identifiers:	Number Type 10.1016/j.intfin.2021.101456 DOI S1042443121001645 Publisher Item Identifier 1481904 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Jonathan Gallacher
Date Added:	26 Oct 2021 10:05
Last Modified:	20 Oct 2022 03:00
URI:	https://irep.ntu.ac.uk/id/eprint/44511

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