Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/216789
Authors: 
Kalemli-Ozcan, Sebnem
Papaioannou, Elias
Peydró, José-Luis
Year of Publication: 
2013
Citation: 
[Journal:] The Journal of Finance [ISSN:] 1540-6261 [Volume:] 68 [Issue:] 3 [Pages:] 1179-1228
Abstract: 
We analyze the impact of financial globalization on business cycle synchronization utilizing a proprietary database on banks’ international exposure for industrialized countries during 1978–2006. Theory makes ambiguous predictions and identification has been elusive due to lack of bilateral time-varying financial linkages data. In contrast to conventional wisdom and previous empirical studies, we identify a strong negative effect of banking integration on output synchronization, conditional on global shocks and country-pair heterogeneity. Similarly, we show divergent economic activity as a result of higher integration using an exogenous de-jure measure of integration based on financial regulations that harmonized EU markets.
Subjects: 
banking integration
Co-movement
contagion
fluctuations
finance
JEL: 
E32
F15
F36
G21
G28
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Manuscript Version (Preprint)

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