Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89640
Authors: 
Degryse, Hans
Lambert, Thomas
Schwienbacher, Armin
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4527
Abstract: 
Initially, voting rights were limited to wealthy elites providing political support for stock markets. The franchise expansion induces the median voter to provide political support for banking development as this new electorate has lower financial holdings and benefits less from the uncertainty and financial returns from stock markets. Our panel data evidence covering 1830-1999 shows that tighter restrictions on the voting franchise induce a greater stock market development, whereas a broader voting franchise is more conducive towards the banking sector, consistent with Perotti and von Thadden (2006). Our results are robust to controlling for other political determinants and endogeneity.
Subjects: 
banking sector
financial development
financial structure
political economy
stock markets
voting franchise
JEL: 
D72
G10
O16
P16
Document Type: 
Working Paper

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