Cole, Rebel and Moshirian, Fari and Wu, Qionbing (2007): Bank stock returns and economic growth. Published in: Journal of Banking and Finance , Vol. 6, No. 32 (June 2008): pp. 995-1007.
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Previous research has established (i) that a country’s financial sector influence future economic growth and (ii) that stock market index returns affect future economic growth. We extend and tie together these two strands of the growth literature by analyzing the relationship between banking industry stock returns and future economic growth. Using dynamic panel techniques to analyze panel data from 18 developed and 18 emerging markets, we find a positive and significant relationship between bank stock returns and future GDP growth that is independent of the previously documented relationship between market index returns and economic growth. We also find that much of the informational content of bank stock returns is captured by country-specific and institutional characteristics, such as bank-accounting-disclosure standards, banking crises, enforcement of insider trading law and government ownership of banks.
|Item Type:||MPRA Paper|
|Original Title:||Bank stock returns and economic growth|
|Keywords:||Banks; Economic Growth; Emerging Markets; Financial Development|
|Subjects:||G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth
|Depositing User:||Prof. Rebel Cole|
|Date Deposited:||01. Mar 2011 20:12|
|Last Modified:||18. Feb 2013 10:09|
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Bank stock returns and economic growth. (deposited 05. Sep 2007)
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