The interest group theory of financial development: Evidence from regulation

Hauner, David; Prati, Alessandro; Bircan, Çağatay

doi:10.1016/j.jbankfin.2012.10.008

Cited by 42 publications

(35 citation statements)

References 37 publications

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“…Rajan and Zingales's (2003) 'interest group theory' argues that the trade and financial openness reduces the influence of interest groups. Consistent with their theory, Hauner et al (2013) find that trade liberalizations lead to financial liberalizations. 5 Recent studies argue that the sophisticating regulation mechanism mitigates the asymmetric information and lowering mispricing such as underpricing.…”

Section: Previous Literature On Deregulations In Financial Markets Ansupporting

confidence: 71%

IPOs, growth, and the impact of relaxing listing requirements

Takahashi

Yamada

2015

Journal of Banking & Finance

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We investigate the impact of relaxing listing requirements on firms' growth around initial public offerings (IPOs). Japan experienced several deregulations of listing requirements in the late 1990s. We use a dataset that covers both public and private firms for more than 30 years, which enables us to compare the firms' operating growth around IPOs as well as to compare the growth under both strict and relaxed listing requirements. When comparing the matched firms, we find that IPO firms' excess growth in profitability and productivity diminished after their IPOs, while their excess growth in terms of size (measured by sales and number of employees) still increased in the post-IPO period. This finding indicates that relaxing listing requirements enables high-growth firms to go public but does not lead to subsequent growth in productivity and profitability, although it does enable firms to be larger more after going public.JEL Classification: G32, G38, L25

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Section: Previous Literature On Deregulations In Financial Markets Ansupporting

confidence: 71%

IPOs, growth, and the impact of relaxing listing requirements

Takahashi

Yamada

2015

Journal of Banking & Finance

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“…A number of studies have examined the arguments of openness theory empirically (Baltagi et al 2009;Hauner et al 2013;) and largely support that higher trade and financial openness in developing countries is positively correlated with financial development. One drawback of all these studies is that they are at the macro-level and measure the financial development of a country with an aggregate bank credit to private sector to GDP ratio (i.e., annual bank credit to private sector/annual gross domestic product).…”

Section: Introductionmentioning

confidence: 99%

“…Our second important contribution is to the openness theory of financial development (Rajan and Zingales 2003;Baltagi et al 2009;Hauner et al 2013;Braun and Raddatz 2008). Rajan and Zingales (2003) argued that trade and financial openness can promote financial development by forcing developing countries to launch financial sector liberalization reforms.…”

Section: Introductionmentioning

confidence: 99%

“…Rajan and Zingales (2003) argued that trade and financial openness can promote financial development by forcing developing countries to launch financial sector liberalization reforms. Some recent studies have investigated the effect of openness on financial development at the macro-level (Baltagi et al 2009;Hauner et al 2013;). We contribute to this debate by examining the impact of trade openness on bank risk-taking behavior at the micro-level.…”

Section: Introductionmentioning

confidence: 99%

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Trade Openness and Bank Risk-Taking Behavior: Evidence from Emerging Economies

Ashraf

Arshad

Liang

2017

JRFM

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Abstract:In this paper, we examine the impact of trade openness on bank risk-taking behavior. Using a panel dataset of 291 banks from 37 emerging countries over the period from 1998 to 2012, we find that higher trade openness decreases bank risk-taking. The results are robust when we use alternative bank risk-taking proxies and alternative estimation methods. We argue that trade openness provides diversification opportunities to banks in lending activities, which decrease overall bank risk. Further to this end, we observe that higher trade openness helps domestic banks to smooth out income volatility and decreases the impact of a financial crisis on banks.

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“…− Influence of liberalisation of trade on financial liberalisation (Hauner et al 2013;(Chinn et al 2006). − Influence of liberalisation of trade on growth of economy (Kose et al 2009;Razin, Rose 1992;Sachs et al 1995).…”

Section: Importance Of Evaluation Of Financial Globalisation Levelmentioning

confidence: 99%

On multiple dimensions of criteria representing financial globalisation

Podviezko

2016

9th International Scientific Conference “Business and Management 2016”

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Abstract. A prevailing contemporary concept of major researchers in the field of economics suggests that financial globalisation creates positive effect on economic growth. Besides this crucial hypothesis many other related with financial liberalisation hypotheses are being tested. Financial liberalisation is an integral part of globalisation. Quantitative gauging of the level of globalisation creates opportunities for more precise identification of causes of prominence or lagging of the home country or any other country in question in comparison with its peers, and creates possibilities to analyse if the country is fully realising its economic potential. Analysis of criteria and their categories, which reflect the level of financial globalisation, is a compulsory step for any quantitative evaluation. The purpose of the study is to reveal importance of accurate evaluation of the level of financial globalisation for allowing further important research to be carried out on such prime economic processes as economic growth, corruption; income inequality; politics; financial stability; prudential policy, to provide a brief overview of the variety of existing approaches available in the literature, which attempt to quantitatively evaluate the level of financial globalisation.

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The interest group theory of financial development: Evidence from regulation

Cited by 42 publications

References 37 publications

IPOs, growth, and the impact of relaxing listing requirements

IPOs, growth, and the impact of relaxing listing requirements

Trade Openness and Bank Risk-Taking Behavior: Evidence from Emerging Economies

On multiple dimensions of criteria representing financial globalisation

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