Working Paper: CEPR ID: DP4395
Authors: Luigi Guiso; Tullio Jappelli; Mario Padula; Marco Pagano
Abstract: The diversity in the current degree of financial development across the EU can be a great opportunity at a time where this area is poised to become increasingly financially integrated. Integration should accelerate the development of the most backward financial markets, and allow companies from these countries to access more sophisticated credit and security markets. In line with a large recent literature, it is reasonable to expect that financial integration will have a ?growth dividend? in Europe. This Paper attempts to quantify this growth dividend, using both industry and firm-level data to estimate the empirical relationship between financial market development and growth, and to gauge how it will distribute itself across countries and sectors.
Keywords: financial development; financial integration; growth
JEL Codes: D92
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial dependence of industries (L52) | financial development (O16) |
| financial integration (F30) | improved access to external finance for firms (O16) |
| countries with developed financial markets (G15) | null result in growth benefits from integration (F69) |
| financial integration (F30) | financial development (O16) |
| financial development (O16) | economic growth (O49) |
| financial integration (F30) | economic growth (O49) |