Hostname: page-component-78c5997874-ndw9j Total loading time: 0 Render date: 2024-11-13T09:33:42.230Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of the Financial Crisis on Financial Integration, Growth and Investment

Published online by Cambridge University Press:  26 March 2020

Robert Inklaar ,
Juan Fernández de Guevara  and
Joaquín Maudos
Robert Inklaar
Affiliation:
University of Groningen
Juan Fernández de Guevara
Affiliation:
IVIE and University of Valencia
Joaquín Maudos
Affiliation:
IVIE and University of Valencia
Get access Rights & Permissions [Opens in a new window]

Abstract

Financial crises, and in particular those of the past few years, have severe consequences for the affected economies. In this paper we analyse the impact of financial development and European financial integration on growth and we find no reversal of the growth benefits of financial development and integration in recent years. This highlights the economic cost of regulatory changes that would reverse European financial integration. We also find that, following a financial crisis, investment declines more in countries with a greater degree of uncertainty aversion, which can be informative for evaluating post-crisis economic performance.

Keywords

Financial criseseconomic growthfinancial integrationuncertainty aversioninvestment
Type
Research Articles
Information
National Institute Economic Review , Volume 220 , April 2012 , pp. R29 - R35
Copyright
Copyright © 2012 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This research was undertaken as part of the INDICSER project, funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities, Grant Agreement no. 244709. Fernández de Guevara and Maudos gratefully acknowledge the financial support of the Spanish Ministry of Education-FEDER through project SEC2010–03333. Maudos also acknowledges the financial support of the Valencian Government (PROMETEO/2009/066). We thank the editor and two anonymous referees for useful comments and suggestions on an earlier version; all remaining errors are our own.

References

Bloom, N.Bond, S.van Reenen, J., (2007), “Uncertainty and investment dynamics?’, The Review of Economic Studies, 74, pp. 391–415.CrossRefGoogle Scholar
European Central Bank (2009), Financial Integration in Europe, Frankfurt, April.Google Scholar
European Central Bank (2011), Financial Integration in Europe, Frankfurt, May.Google Scholar
European Commission (2009), European Financial Integration Report, Brussels.Google Scholar
Fernández de Guevara, J.Maudos, J., (2009), “Regional financial development and bank competition: effects on firms’ growth?’, Regional Studies, 43(2), pp. 211–28.Google Scholar
Fernández de Guevara, J.Maudos, J., (2010), ‘Financial crisis, financial integration and economic growth. The European case?’, Working Paper, 2010–2, BBVA Foundation.CrossRefGoogle Scholar
Hofstede, G.H., (2001), Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations across Nations, Thousand Oaks, CA, Sage Publications.Google Scholar
Hutchison, M.M.Noy, I., (2005), “How bad are twins? Output costs of currency and banking crises?’, Journal of Money, Credit and Banking, 37(4), pp. 725–52.CrossRefGoogle Scholar
Inklaar, R.Yang, J., (2012), “The impact of financial crises and tolerance for uncertainty?’, Journal of Development Economics, 97(2), pp. 466–80.CrossRefGoogle Scholar
Joyce, J.P.Nabar, M., (2009), “Sudden stops, banking crises and investment collapses in emerging markets?’, Journal of Development Economics, 90, pp. 314–22.CrossRefGoogle Scholar
Laeven, L.Valencia, F., (2008), ‘Systemic banking crises: a new database?’, IMF Working Paper, WP/08/224.CrossRefGoogle Scholar
Maudos, J.Fernández de Guevara, J., (2011), “Banking competition and economic growth: cross-country evidence?’, The European Journal of Finance, 17(7–8), pp. 739–64.Google Scholar
Obstfeld, M., (1994), “Risk-taking, global diversification and growth?’, American Economic Review, 84, pp. 1310–29.Google Scholar
Rajan, R.Zingales, L., (1998), “Financial dependence and growth?’, American Economic Review, 88(3), pp. 559–87.Google Scholar