Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212730 
Authors: 
Year of Publication: 
2012
Series/Report no.: 
BOFIT Discussion Papers No. 6/2012
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper examines financial sector characteristics in resource-dependent economies. Using a unique dataset covering 133 countries, we present empirical evidence that the banking sector tends to be smaller in resource-dependent economies, even when controlling for several other factors which have been shown to have a significant effect on financial sector development in previous studies. Moreover, the threshold level at which the increasing resource-dependence begins to be harmful for domestic banking sector is very low. We also find evidence that the use of market-based and foreign financing is more common in resource-dependent economies. Further, we argue that a relatively small financial sector used to cater the needs of the resource sector might be unfavorable for emerging businesses, thereby hampering economic diversification and reinforcing the resource curse. resource dependence, resource curse, financial sector, banks, panel data, G20, O16, O57, Q32
JEL: 
G20
O16
O57
Q32
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-737-5
Document Type: 
Working Paper

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