Skip to main content

Financial System Structure and Economic Development: Structure Matters


This paper investigates how the structure of a financial system—whether it is bank or market oriented— affects economic growth. In contrast to earlier research, which indicates that the financial system’s structure is irrelevant for growth, I find that countries grow faster when they have flexible judicial system and more market-oriented financial systems.

JEL Classification: G0, K2, O4
Key Words: economic growth, judicial flexibility, banks, stock market, financial development


Suggested citation: Ergungor, Ozgur Emre, 2003. “Financial System Structure and Economic Development: Structure Matters,” Federal Reserve Bank of Cleveland, Working Paper, no. 03-05.

Upcoming EventsSEE ALL