publication . Preprint . Article . 2000

Financial Restraints in the South Korean Miracle

Panicos O. Demetriades; Kul B. Luintel;
Open Access
  • Published: 01 Sep 2000
We provide novel empirical evidence on the effects of financial restraints on South Korean financial development. The evidence is linked to a simple model of the Korean banking system that encapsulates its cartelised nature, which predicts a positive association between financial development and (i) the degree of state control over the banking system, (ii) mild repression of lending rates. The model also predicts that in the presence of lending rate controls, increases in the level of the administered deposit rate are unlikely to influence financial deepening. We test the model empirically by constructing individual and summary measures of financial restraints. ...
free text keywords: Financial deepening; financial restraints, Economics and Econometrics, Development, jel:O16, jel:G18, jel:G28, Empirical evidence, Financial system, Indirect finance, Financial deepening, Finance, business.industry, business, Financial development, Financial repression, Deposit rate, Interest rate, media_common.quotation_subject, media_common, State control, Economics
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