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Finance and Credit Market

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The Diversity of Emerging Capitalisms in Developing Countries

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Abstract

In this chapter, the author (Dalila Nicet-Chenaf) draws from the literature a set of variables describing financial systems, their different forms and type of institutional governance. The analysis then proceeds by contrasting the various types of financial sector governance in terms of their degree of financial depth and their particular banking and market-finance mix, four financial models are identified. The intermediated (repressed) model is typical of many developing and emerging economies. It is characterized by limited financial depth, high state banking sector regulation levels, financial repression and low levels of investor and creditor protection. Some emerging economies exhibit embryonic models marked by intermediate degrees of financial depth and a significant bias towards banking finance. The mature model has high depth and relatively even proportions of banking and market finance.

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Notes

  1. 1.

    However, for Rajan and Zingales (1998), financial development may predict economic growth simply because financial markets anticipate future growth. Equally, these authors consider that the stock market capitalizes the present value of growth opportunity, while financial institutions lend more if economic sectors grow.

  2. 2.

    In our empirical study we introduce the amount of public debt financed by securities.

  3. 3.

    On informal finance as both a substitute for and a complement to formal finance, see Allen et al. (2013a,b).

  4. 4.

    Governmental financial sources include revenues from taxes on bank capital or bank profits, dividend income from bank stock, and the mandatory purchase of government bonds.

  5. 5.

    The sources are presented in Table 8.5.

  6. 6.

    This index varies from 0 (less protection) to 10 (more protection).

  7. 7.

    This index varies from 0 (less information) to 6 (more information).

  8. 8.

    Note that these variables do not affect the construction of principal factors.

  9. 9.

    The ‘factorability’ of the database was verified: The Bartlett’s test of sphericity shows that the correlation matrix is statistically different from an identity matrix (p = 0.000), and the Kaiser-Meyer-Olkin score of sampling adequacy is 0.8, which is close to 1 (>0.6), indicating that patterns of correlation are relatively compact. Factor analysis is therefore appropriate.

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Author information

Authors and Affiliations

  1. LAREFI, PESSAC CEDEX, France

    Dalila Nicet-Chenaf

Authors
  1. Dalila Nicet-Chenaf
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Editor information

Editors and Affiliations

  1. University of Bordeaux, GREThA, PESSAC CEDEX, France

    Eric Rougier

  2. University of Bordeaux, GREThA, PESSAC CEDEX, France

    François Combarnous

Appendix

Appendix

Table 8.5 Data sources
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Table 8.6 Correlation matrix
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Table 8.7 Data summary statistics—averages for 13 countries (standard deviation)
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Table 8.8 Data summary statistics—averages for 131 countries (standard deviation)
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Table 8.9 Elementary statistics about supplementary variables
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Nicet-Chenaf, D. (2017). Finance and Credit Market. In: Rougier, E., Combarnous, F. (eds) The Diversity of Emerging Capitalisms in Developing Countries. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-49947-5_8

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  • DOI: https://doi.org/10.1007/978-3-319-49947-5_8

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  • Publisher Name: Palgrave Macmillan, Cham

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