Banking structure and economic growth: Evidence
from China

doi:10.1007/s11459-009-0026-z

Front. Econ. China

2009, Vol. 4

Issue (4) : 479-504 https://doi.org/10.1007/s11459-009-0026-z

Research articles

Banking structure and economic growth: Evidence from China

Justin Yifu LIN¹, Xifang SUN²,

1.The World Bank, Washington, DC 20433, USA; 2.Seoul National University, Seoul 151–747, Korea;

Download: PDF(561 KB)
Export: BibTeX | EndNote | Reference Manager | ProCite | RefWorks

Abstract With panel data for 28 Chinese provinces (autonomous regions, municipalities) during 1985–2002, this paper assesses the effect of banking structure on economic growth. Banking structure is defined as the relative importance of banks of different size in the banking sector. The market share of small banking institutions is taken as a proxy to measure the banking structure. In dealing with the potential endogeneity problem, this paper constructs an instrumental variable for banking structure with the information on the commercialization reform of state-owned banks initiated in 1994. The estimation results from a two-way fixed-effect model show that increases in the market share of small banking institutions enhance economic growth in contemporary China.

Keywords optimal financial structure banking structure economic growth

Issue Date: 05 December 2009

Cite this article:

Justin Yifu LIN,Xifang SUN. Banking structure and economic growth: Evidence from China[J]. Front. Econ. China, 2009, 4(4): 479-504.

URL:

https://academic.hep.com.cn/fec/EN/10.1007/s11459-009-0026-z
https://academic.hep.com.cn/fec/EN/Y2009/V4/I4/479

[1]	Zhaomin Zhang. Inter-Region Transportation Costs, Regional Economic Growth, and Disparities in China[J]. Front. Econ. China, 2020, 15(2): 282-311.
[2]	Jun Zhang. Five Basic Insights into the Economic Impact of the COVID-19 Outbreak[J]. Front. Econ. China, 2020, 15(2): 167-178.
[3]	Xianchun Xu. The Slowdown of China’s Economic Growth in Terms of Statistics[J]. Front. Econ. China, 2019, 14(1): 72-79.
[4]	Justin Yifu Lin. China’s Growth Deceleration: Causes and Future Growth Prospect[J]. Front. Econ. China, 2019, 14(1): 26-52.
[5]	Guoqiang Tian. Deceleration of China’s Economic Growth: Causes and Countermeasures[J]. Front. Econ. China, 2019, 14(1): 3-25.
[6]	Jiwei Lou. The Possibility and Approaches to an Upper Middle Growth Rate[J]. Front. Econ. China, 2016, 11(2): 196-209.
[7]	Robert Barro. China’s Growth Prospects[J]. Front. Econ. China, 2016, 11(2): 192-195.
[8]	Pak Hung Mo. Democracy and Economic Growth: Optimal Level and Transmission Channels[J]. Front. Econ. China, 2015, 10(1): 85-112.
[9]	Derong Zhang. The Mechanism of the Middle Income Trap and the Potential Factors Influencing China’s Economic Growth[J]. Front. Econ. China, 2014, 9(3): 499-528.
[10]	Ding Lu. How Green is China’s Path of Catching Up? An International Comparative Evaluation[J]. Front. Econ. China, 2014, 9(3): 484-498.
[11]	Yanrui Wu. Productivity, Economic Growth and the Middle Income Trap: Implications for China[J]. Front. Econ. China, 2014, 9(3): 460-483.
[12]	Zhuoshun Xu, Leshun Xu. The Potential Impact of Sino-Korean Bilateral Trade on Economic Growth and the Environment: A CGE Model Analysis[J]. Front Econ Chin, 2012, 7(4): 560-579.
[13]	Hongchun Zhao. An Accounting Method for Economic Growth[J]. Front Econ Chin, 2012, 7(1): 44-69.
[14]	Ding Lu. Transition of China’s Growth Pattern[J]. Front Econ Chin, 2011, 6(4): 535-555.
[15]	Wenpu Li, Min Gong. China’s Growth Model and Structural Unbalance in the Open Economy[J]. Front Econ Chin, 2011, 6(2): 327-344.

Viewed

Full text

Abstract

Cited

Shared

Discussed