Effects of institutional environment on global banking development

Autor: Jorge Andrés Muñoz Mendoza, Sandra María Sepúlveda Yelpo, Carmen Lissette Veloso Ramos
Jazyk: English<br />Spanish; Castilian
Rok vydání: 2018
Předmět:
Zdroj: RAN, Vol 4, Iss 2, Pp 23-34 (2018)
Druh dokumentu: article
ISSN: 0719-7713
0719-6245
Popis: We investigated the effects of institutional environment on banking development. These effects were quantified directly for banking development as well as indirectly for financial stability and diversification activities. We used a dynamic regression model proposed by Arellano & Bond (1991) for a balanced panel of 134 countries between 1994 and 2011. Our results indicate that institutional environment improvements promote banking development. This result is observed for the institutional characteristics of both public and regulatory environments. Diversification has a positive impact on the degree of banking development, showing that banks obtain a credit benefit from economies of scale. Non-linearity observed for diversification effects indicate that positive effects are reversed at high diversification levels. Financial stability has a negative effect, which demonstrates that banking entails financial risk for the sector.
Databáze: Directory of Open Access Journals