Banks in developed and developing exchanges: an empirical analysis using new variables. [Working paper]

Ghimire, Binam; Giorgioni, Gianluigi; Laws, Jason

Abstract

This paper examines the relationship between banks and stock markets in developed and underdeveloped exchanges. We have constructed data on market capitalisation of banks and non-bank companies for eighteen years including data on age of exchanges. The simple Johansen (1988) cointegration technique was applied to ten different stock markets to find exchanges that rely less on banks and which are more developed. In addition, the hypothesis that underdeveloped exchanges will have a higher level of cointegration between banks and non bank-companies has been confirmed with a high 95% confidence interval. The results of the investigations have been further verified with the performance of an exchange not included in the empirical investigation. The paper suggests listing of more non-bank companies is important for the development of exchanges.

Citation

GHIMIRE, B., GIORGIONI, G. and LAWS, J. 2010. Banks in developed and developing exchanges: an empirical analysis using new variables. [Working paper]. Hosted on OpenAIR [online]. Available from: https://rgu-repository.worktribe.com/output/2439921

• Working Paper Type: Working Paper
• Deposit Date: Aug 20, 2024
• Publicly Available Date: Aug 20, 2024
• Keywords: Banks; Stock markets; Stock exchanges; Economy development
• Public URL: https://rgu-repository.worktribe.com/output/2439921
• Publisher URL: https://rgu-repository.worktribe.com/output/2439921