Trade in Financial Services: Procompetitive Effects and Growth Performance
1999-04-14
Research Paper
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In this paper we explore linkages between financial services trade and growth. We offer a formalization of the argument that trade, through the fostering of financial market integration, may yield important long-run effects related to increased competition. The relationships formalized here link long-run economic performance to scale economies and cost structures in the financial services sector, and to market concentration in the sector. We first develop an analytical model. This motivates an econometric exercise. Cross- country growth regressions point to a strong positive relationship between financial sector competition and financial sector openness, and between growth and financial sector competition.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- F43 : Economic Growth of Open Economies
- F40 : Macroeconomic Aspects of International Trade and Finance: General
- F13 : Commercial Policy; Protection; Promotion; Trade Negotiations; International Organizations
Automatically Extracted Terms
- service
- growth
- trade
- sector
- services trade
- market
- competition
- services sector
- equation
- capital
- sector openness
- effect
- openness
- income
- development
- growth rates
- figure
- country
- profit
- concentration
