Bank-Based or Market-Based Financial Systems: Which is Better? [report]

Ross Levine
2002 unpublished
For over a century, economists and policy makers have debated the relative merits of bank-based versus market-based financial systems. Recent research, however, argues that classifying countries as bank-based or market is not a very fruitful way to distinguish financial systems. This paper represents the first broad, cross-country examination of which view of financial structure is more consistent with the data. The results indicate that although overall financial development is robustly linked
more » ... is robustly linked with economic growth, there is no support for either the bank-based or market-based view.
doi:10.3386/w9138 fatcat:fofmsvveovfixcufhfcgxpvr5e