Simplice A., Simplice (2011): Why do French civil-law countries have higher levels of financial efficiency?
Download (147kB) | Preview
The dominance of English common-law countries in prospects for financial development in the legal-origins debate has been debunked by recent findings. Using exchange rate regimes and economic/monetary integration oriented hypotheses, this paper proposes an “inflation uncertainty theory” in providing theoretical justification and empirical validity as to why French civil-law countries have higher levels of financial allocation efficiency. Inflation uncertainty, typical of floating exchange rate regimes accounts for the allocation inefficiency of financial intermediary institutions in English common-law countries. As a policy implication, results support the benefits of fixed exchange rate regimes in financial intermediary allocation efficiency.
|Item Type:||MPRA Paper|
|Original Title:||Why do French civil-law countries have higher levels of financial efficiency?|
|Keywords:||Banking; allocation efficiency; exchange rate; inflation; economic integration|
|Subjects:||R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R10 - General
K - Law and Economics > K0 - General > K00 - General
D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency ; Cost-Benefit Analysis
P - Economic Systems > P5 - Comparative Economic Systems > P50 - General
G - Financial Economics > G2 - Financial Institutions and Services > G20 - General
|Depositing User:||Simplice Anutechia Asongu|
|Date Deposited:||19. Oct 2011 06:27|
|Last Modified:||24. Mar 2015 09:58|
Agbor, J.A., (2011), “How Does Colonial Origin Matter for Economic Performance in Sub-Saharan Africa”, World Institute for Development Economics Research, Working Paper, No. 2011/27.
Asongu, S.A., (2011), “Law, finance, economic growth and welfare: why does legal origin matter?”. MPRA Paper No.33868.
Allen, F., Qian, J. & Qian, M., (2005), “Law, finance and economic growth in China”, Journal of Financial Economics, 77, pp.57-116.
Beck, T., Demirgüç-Kunt, A., & Levine, R.,(2003), “Law and finance: why does legal origin matter?”, Journal of Comparative Economics, 31, pp. 653-675.
Beck, T., & Levine, R., (2002), “Industry growth and capital allocation: does having a market- or bank-based system matter?” Journal of Financial Economics, 64, pp.147–180.
Berkowitz, D., Pistor, K., & Richard, J., (2002), “Economic development, legality and the transplant effect”, European Economic Review, 47(1), pp. 165-195.
Demirguc-Kunt, A., Beck, T., & Levine, R., (1999), “A New Database on Financial Development and Structure”, International Monetary Fund, WP 2146.
Demirguc-Kunt, A., & Maksimovic, V., (1998), “Law, finance, and firm growth”, Journal of Finance, 53, pp. 2107–2137.
Djankov, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A., (2003), “Courts”, Quaterly Journal of Economics, 118, pp.453-517.
Engle, R., (1983). "Estimates of the Variance of U.S. Inflation Based Upon the ARCH Model."Journal of Money, Credit and Banking 15(3), pp. 286–301.
Evans, M., & Wachtel. P., (1993). "Inflation Regimes and the Sources of Inflation Uncertainty."Journal of Money, Credit and Banking 25(3, Part 2), pp. 475–511.
Foster, E., (1978). "The Variability of Inflation." Review of Economics and Statistics, 60(3), pp.346–350.
Hassan, K., Sanchez, B., & Yu, J., (2011), “Financial development and economic growth: New evidence from panel data”, The Quarterly Review of Economics and Finance, 51, pp.88-104.
Jayaratne, J., & Strahan, P., (1996), “The finance-growth nexus: evidence from bank branch deregulation”, Quarterly Journal of Economics, 111,pp. 639–670.
King, R.,& Levine, R.,(1993), “Finance and growth: Schumpeter might be right”, Quarterly Journal of Economics, 108, pp.717-738.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R.W., (1998), “Law and finance”, Journal of Political Economy, 106(6), pp. 1113-1155.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R.W., (1999), “The quality of government”, Journal of Law, Economics and Organization, 15, pp.222-279.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R.W., (2000), “ Investor protection and corporate governance”, Journal of Financial Economics, 58, pp.141-186.
Levine, R., & King, R.G., (1993). “Finance and Growth: Schumpeter Might be Right”, The Quarterly Journal of Economics, 108, pp.717-737.
Levine, R., & Zervos,S.,(1998), “Stock market, banks and economic growth”, American Economic Review, 88, pp.537-558.
Logue, D. & T. Willett. 1976. "A Note on the Relation Between the Rate and Variability of Inflation." Economica, 43(17), pp.151–58.
Lucas, R. E., (1972). “Expectations and the Neutrality of Money.” Journal of Economic Theory, 4(2), pp.103–124.
McKinnon, R., (1973), Money and Capital in Economic Development. Brookings Institution Press, Washington DC.
Mundell, R., (1972), African trade, politics and money. In Tremblay, R., ed., Africa and Monetary Integration. Les Editions HRW, Montreal, pp. 11-67.
Rajan, R., & Zingales, L., (1998) “Financial dependence and growth”, American Economic Review, 88, pp. 559–586.
Summers, L., (1991). "How Should Long-Term Monetary Policy Be Determined?" Journal ofMoney, Credit and Banking 23(3), pp.625–631.
Okun, A., (1971). "The Mirage of Steady Inflation." Brookings Papers on Economic Activity 2,pp.485–498.