English
 
Help Privacy Policy Disclaimer
  Advanced SearchBrowse

Item

ITEM ACTIONSEXPORT

Released

Paper

Public Ownership of Banks and Economic Growth – The Role of Heterogeneity

MPS-Authors
/persons/resource/persons183196

Schnabel,  Isabel
Max Planck Institute for Research on Collective Goods, Max Planck Society;

Fulltext (public)
There are no public fulltexts stored in PuRe
Supplementary Material (public)
There is no public supplementary material available
Citation

Körner, T., & Schnabel, I. (2010). Public Ownership of Banks and Economic Growth – The Role of Heterogeneity.


Cite as: http://hdl.handle.net/11858/00-001M-0000-0028-6EF6-7
Abstract
In an influential paper, La Porta, Lopez-De-Silanes and Shleifer (2002) argued that public ownership of banks is associated with lower GDP growth. We show that this relationship does not hold for all countries, but depends on a country’s financial development and political institutions. Public ownership is harmful only if a country has low financial development and low institutional quality. The negative impact of public ownership on growth fades quickly as the financial and political system develops. In highly developed countries, we find no or even positive effects. Policy conclusions for individual countries are likely to be misleading if such heterogeneity is ignored.