Citation

Discussion Paper Details

Please find the details for DP8138 in an easy to copy and paste format below:

Full Details | Bibliographic Reference

Full Details

Title: Public Ownership of Banks and Economic Growth - The Role of Heterogeneity

Author(s): Tobias K�rner and Isabel Schnabel

Publication Date: December 2010

Keyword(s): Economic growth, Financial development, Political institutions, Public banks and Quality of governance

Programme Area(s): Development Economics and Financial Economics

Abstract: In an influential paper, La Porta, Lopez-De-Silanes and Shleifer (2002) argued that public ownership of banks is associated with lower GDP growth. We show that this relationship does not hold for all countries, but depends on a country?s financial development and political institutions. Public ownership is harmful only if a country has low financial development and low institutional quality. The negative impact of public ownership on growth fades quickly as the financial and political system develops. In highly developed countries, we find no or even positive effects. Policy conclusions for individual countries are likely to be misleading if such heterogeneity is ignored.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8138

Bibliographic Reference

K�rner, T and Schnabel, I. 2010. 'Public Ownership of Banks and Economic Growth - The Role of Heterogeneity'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8138