Capital Market Regimes and Bank Structure in Europe |
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| Authors: | RONALD E SHRIEVES DREW DAHL MICHAEL F SPIVEY |
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| Institution: | 1. Ronald E. Shrieves is at the Department of Finance, University of Tennessee (E‐mail: ronaldshrieves@comcast.net).;2. Drew Dahl is the Harold and Ruth Dance Professor of Finance at the Department of Economics and Finance, Utah State University (E‐mail: drew.dahl@usu.edu).;3. Michael F. Spivey is a Professor of Finance at the School of Accountancy and Finance, Clemson University (E‐mail: spivey@clemson.edu). |
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| Abstract: | We hypothesize that fundamental features that distinguish European capital markets have predictably influenced emerging national differences in bank capitalization and loan growth. Using bank‐level data from 13 European countries, 1998 to 2004, we find evidence of positive effects of “equity‐friendly” market features on bank capitalization and positive effects of both “equity‐friendly” and “credit‐friendly” market features on loan growth. The findings are strongest in small banks and in banks with cooperative charters. Our results suggest that ongoing and prospective integration of European banking markets is mitigated by relatively static features of the equity and credit markets on which banks rely. |
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| Keywords: | F33 F36 G21 G28 G32 G38 international banking market integration shareholder protection |
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