Bank Competition, Financial Dependence, and Economic Growth in the Gulf Cooperation Council

The relationship between bank competition, firm access to finance, and economic growth is a much debated topic in the economic literature and in policy circles. This paper uses a panel of 23 manufacturing sectors over 2002-10 to investigate the impact of bank competition on industry growth in the Gulf Cooperation Council economies. The results show that greater competition allows financially dependent firms to grow faster. In addition, the results show that lower restrictions on banks’ permissible activities, better credit information, and greater institutional effectiveness mitigate the damaging impact of low competition. These results are robust to a variety of checks. The findings suggest that improving bank competition should be an important aspect of the financial sector development agenda in the Gulf Cooperation Council.

Bibliographic Details

Main Authors:	Caggiano, Giovanni, Calice, Pietro
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-05
Subjects:	ACCESS TO CREDIT, CREDIT MARKETS, FOREIGN ENTRY, CAPITAL MARKETS, FINANCIAL SERVICES, BORROWER, STATE‐OWNED BANKS, ECONOMIC GROWTH, EXTERNAL FINANCING, CREDIT ALLOCATION, CAPITAL ACCUMULATION, EXTERNAL FUNDS, FINANCING, FINANCIAL MANAGEMENT, BANKING INDUSTRY, INTEREST, MORAL HAZARD, INDUSTRY, BIAS, PRIVATE CREDIT, AVAILABILITY OF CREDIT, BANKING SYSTEM, SERVICES, PUBLIC SERVICES, ACCESS TO EXTERNAL FINANCE, BANKING SYSTEMS, CAPITAL STRUCTURE, CREDIT CONSTRAINTS, DEFAULT RISK, INFORMATION SHARING, ECONOMIC POLICY, SOURCES OF FINANCE, BORROWERS, BANK ASSETS, GREATER ACCESS, INTERNATIONAL BANK, INFORMATION ASYMMETRIES, CASH FLOWS, BANK COMPETITION, BANKING SECTOR, BANK LENDING, BANKING CRISES, EXTERNAL FINANCE, LACK OF CREDIT, CREDIT ACCESS, RETURN ON ASSETS, FOREIGN BANKS, ADVANCED ECONOMIES, CREDIT BUREAUS, LENDING DECISIONS, CORPORATE FINANCE, FINANCIAL SERVICES PROVIDERS, FINANCIAL INSTITUTIONS, MARKETS, ENTRY BARRIERS, ACCESS TO FINANCE, ENTERPRISES, FINANCIAL ACCESS, BANK CREDIT, REAL ESTATE, FINANCE, INFORMATION ASYMMETRY, BANKS, STATE‐ OWNED BANKS, CREDIT INFORMATION, CREDIT REGISTRIES, CAPITAL, RETAIL BANKING, FINANCIAL STABILITY, PUBLIC POLICIES, VALUE, BANK, CREDIT, ACCESSIBILITY, EXPENDITURES, CIVIL SERVICE, GOVERNMENT INTERVENTION, RISK OF BANK FAILURE, DIVERSIFICATION, SECURITIES, SYSTEMIC INSTABILITY, GOVERNANCE, INSURANCE, FINANCIAL DEVELOPMENT, ECONOMIC DEVELOPMENT, RETAINED EARNINGS, INVESTMENT, FINANCIAL INTERMEDIATION, RISK, CREDIT REGISTRY, FINANCIAL MARKETS, BANKING, COOPERATION, FINANCIAL SECTOR DEVELOPMENT, REVENUE, EARNINGS, BORROWING, LENDING, CAPITAL EXPENDITURES, ENTREPRENEURSHIP, GOVERNMENTS, BANK FAILURE, FINANCIAL DEPTH, INCOME GROUPS, CREDIT MARKET, COMPETITION, EMPLOYEES,
Online Access:	http://documents.worldbank.org/curated/en/2016/05/26419585/bank-competition-financial-dependence-economic-growth-gulf-cooperation-council http://hdl.handle.net/10986/24526
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