Are modern financial systems shaped by state antiquity?

Beng Jiunn Ang

Research output: Contribution to journalArticleResearchpeer-review

23 Citations (Scopus)

Abstract

We demonstrate that existing differences in financial development between countries can be explained by the cumulative variations in their levels of state experience since 1 AD. This dimension of early historical development has not been considered so far in studies that analyze the determinants of financial development. The estimation allows for all major theories established in the literature as possible explanations for the disparity of financial development across the globe. Significance of state antiquity is robust to the use of alternative indicators of financial development, the consideration of different lengths and periods of statehood, and controlling for a range of variables or country characteristics. Our results highlight the important role of statehood in propelling financial system development, and thus provide some support to the view that historically determined differences in the early-start developmental advantage provide the basis for explaining the fundamental sources of variations in financial development between countries today.
Original languageEnglish
Pages (from-to)4038 - 4058
Number of pages21
JournalJournal of Banking and Finance
Volume37
Issue number11
DOIs
Publication statusPublished - 2013

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