Financial development, rule of law and wealth inequality : Bayesian model averaging evidence

Show full item record

Title: Financial development, rule of law and wealth inequality : Bayesian model averaging evidence
Author: Horvath, Roman ; Horvatova, Eva ; Siranova, Maria
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
Series number: 12/2017
Year of publication: 2017
Publication date: 21.8.2017
Subject (yso): taloudellinen kehitys; lainsäädäntö; rahoitusmarkkinat; vakaus; sääntely; varallisuus; tulonjako
Keywords: Bofit-kokoelma; mallit; osakemarkkinat; pankkitoiminta
JEL: G10; G20
Other keywords: financial development; Bayesian model averaging; rule of law; wealth inequality
Abstract: We examine the determinants of financial development using our global sample and employing a rich set of measures of financial development that assess the degree of depth, access, stability and efficiency of financial intermediaries. We use Bayesian model averaging to test competing theories within this unifying framework. Examining nearly 40 potential determinants of financial development, we find that the rule of law and the level of economic development are the most important. Wealth inequality is irrelevant for banking sector development but positively associated with stock market development. Finally, our results suggest that financial market regulations matter for stock market efficiency and financial stability.
Rights: https://helda.helsinki.fi/bof/copyright


Files in this item

Total number of downloads: Loading...

Files Size Format View
dp1217.pdf 756.7Kb PDF View/Open

This item appears in the following Collection(s)

Show full item record