Taming financial development to reduce crises

Naceur, Sami Ben; Candelon, Bertrand; Lajaunie, Quentin

doi:10.1016/j.ememar.2019.05.003

Cited by 30 publications

(11 citation statements)

References 40 publications

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“…Banks located in countries with more developed and complex financial systems that are creditors to the world are more prone to systemic distress exposure (Table 10, Model (1)) because financial development provides insurance against risk (Mendoza et al, 2009). Financial institution development amplifies systemic risk, both standalone and in interaction with the NIIP Dummy (Model (2)), supporting the conclusion that bank-based financial structures are linked to more systemic risk (Langfield and Pagano, 2016;Bats and Houben, 2020), and that financial institution development is a more important predictor of banking crises than financial market development (Naceur et al, 2019).…”

Section: Further Analysismentioning

confidence: 78%

External Wealth of Nations and Systemic Risk

et al. 2022

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Section: Further Analysismentioning

confidence: 78%

External Wealth of Nations and Systemic Risk

et al. 2022

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“…They find that an increasing share of SME lending in total bank lending reduces the share of non-performing loans and decreases financial institutions' probability of default. Naceur et al (2019) assess the financial stability impact of various components of financial development, including people and firms' abilities to access financial services. They use a sample of 98 countries covering the period 1980-2016, and proxy financial stability using systemic financial market failures data from Laeven and Valencia (2013).…”

Section: The Effect Of Increased Access To Consumer Loans and Mortgagesmentioning

confidence: 99%

“…Naceur et al. (2019) assess the financial stability impact of various components of financial development, including people and firms' abilities to access financial services. They use a sample of 98 countries covering the period 1980–2016, and proxy financial stability using systemic financial market failures data from Laeven and Valencia (2013).…”

Section: Literature Review: Financial Inclusion and Financial Stabilitymentioning

confidence: 99%

The interplay of financial education, financial inclusion and financial stability and the role of Big Tech

Jonker

Kosse

2022

Contemporary Economic Policy

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The entry of Big Techs in the financial ecosystem might affect financial stability, among others through the opportunities and challenges they create for financial inclusion. We survey the literature to determine the effectiveness of financial education in improving financial literacy and inclusion and assess the impact of financial inclusion on financial stability. We argue for new research to determine whether financial education can help people to reap the financial‐inclusion benefits that Big Tech may bring. We also conclude that financial‐inclusion opportunities created by Big Tech might introduce financial stability risks and underline the importance of proper supervision and regulation.

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“…On another note, Naceur et al (2019) have shown that the institutional dimension (rather than the market dimension) of financial development promotes financial stability, particularly in emerging markets and low-income countries. Thus, by contributing to greater financial stability, financial development help dampen the effects of external shocks on the economy and contribute to greater stability of services export revenue.…”

Section: Services Export Revenue Volatilitymentioning

confidence: 99%

Services export diversification and services export revenue stability: does trade openness matter?

Gnangnon

2021

ITPD

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PurposeThe international trade literature has established that export product diversification lowers export product revenue instability. The current analysis investigates whether this finding carries over services exports.Design/methodology/approachThe empirical analysis covers a sample of 152 countries over the period 1980–2014 and employs the two-step system generalized method of moments (GMM) approach.FindingsThe empirical findings indicate that services export diversification reduces services export revenue instability both over the full sample as well as over sub-samples of high-income countries (HICs), least developed countries (LDCs) as well as developing countries (i.e. non-HICs) that are not LDCs. HICs appear to experience a higher positive effect of services export diversification on services export revenue instability than in developing countries. The analysis also shows that countries that further open-up to international trade enjoy a greater reducing effect of services export diversification on the instability of services export revenue.Research limitations/implicationsThis analysis, therefore, adds to the existing studies on the relationship between export product diversification and the instability of revenue derived from goods exports by focusing on the services export side. An important message from the analysis is that countries that diversify their services export basket enjoy lower services export revenue instability when they further integrate into the world trade market.Practical implicationsThis study highlights the importance of services export diversification, including for stabilizing services export revenue to services traders. Diversifying services export items, including across traditional and modern services sectors involves the implementation of a wide range of policies and measures, of which the liberalization of the services sectors through reduction and eventually the elimination of services trade barriers; the improvement of the business environment and the development of domestic financial markets (see for example, Hoekman, 2017). It could be interesting that another study consider policies and measures that could promote services export diversification.Originality/valueTo the best of the authors’ knowledge, this is the first time this topic is being addressed, including empirically.

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Taming financial development to reduce crises

Cited by 30 publications

References 40 publications

External Wealth of Nations and Systemic Risk

External Wealth of Nations and Systemic Risk

The interplay of financial education, financial inclusion and financial stability and the role of Big Tech

Services export diversification and services export revenue stability: does trade openness matter?

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