Kpodar, KangniSingh, Raju Jan2012-03-192012-03-192011-12-01https://hdl.handle.net/10986/3685Although there has been research looking at the relationship between the structure of the financial system and economic growth, much less work has dealt with the importance of bank-based versus market-based financial systems for poverty and income distribution. Empirical evidence has indicated that the structure of the financial system has little relevance for economic growth, suggesting that the same could be true for poverty since growth is an important driver in reducing poverty. Some theories, however, claim that, by reducing information and transaction costs, the development of bank-based financial systems could exert a particularly large impact on the poor. This paper looks at a sample of 47 developing economies from 1984 through 2008. The results suggest that when institutions are weak, bank-based financial systems are better at reducing poverty and, as institutions develop, market-based financial systems can turn out to be beneficial for the poor.CC BY 3.0 IGOACCESS TO CREDITACCESS TO EDUCATIONACCESS TO FINANCEACCESS TO MARKETSACCESS TO SERVICESACCOUNTINGADVANCED COUNTRIESADVERSE SELECTIONAGRICULTURAL SECTORAMOUNT OF COLLATERALBAD BANKSBANK ASSETSBANK BRANCHBANK BRANCHESBANK CREDITBANK LOANSBANK POLICYBANKING CONCENTRATIONBANKING SECTORBANKING SECTOR DEVELOPMENTBANKING SECTOR EFFICIENCYBANKING SYSTEMBANKING SYSTEMSBASIC NEEDSBONDBORROWINGCAPITAL ALLOCATIONCAPITALIZATIONCENTRAL BANKSCHILD LABORCLEAN WATERCOLLATERALCOMMERCIAL BANKCOMMERCIAL BANK ASSETSCOMMERCIAL BANKSCONSUMER PRICE INDEXCONTRACT ENFORCEMENTCORPORATE FINANCECOUNTRY COMPARISONSCOUNTRY RISKCREDIT CONSTRAINTSCREDIT GROWTHCREDIT MARKETCREDIT MARKETSCREDIT RATIONINGCREDITORCREDITOR RIGHTSCURRENCYDEBTDEFAULTSDEPOSITDEPOSIT INSURANCEDEPOSIT MONEY BANKSDEPOSITSDEREGULATIONDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPMENT BANKINGDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDISCRIMINATIONDISTRIBUTION OF INCOMEDOMESTIC EQUITIESDOMESTIC EXCHANGESDURABLEDURABLE ASSETSEARNINGSECONOMETRICSECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OPPORTUNITIESECONOMIC PERFORMANCEECONOMIC RESEARCHECONOMIC THEORYEDUCATION LEVELEMPLOYMENTENROLMENT RATEENTREPRENEURENTREPRENEURSEQUITY MARKETSEXPECTED RETURNEXPORTSFINANCIAL DEEPENINGFINANCIAL DEPTHFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIARYFINANCIAL INTERMEDIATIONFINANCIAL LIBERALIZATIONFINANCIAL MARKETSFINANCIAL SECTOR DEVELOPMENTFINANCIAL SECTOR REFORMSFINANCIAL SERVICESFINANCIAL STRUCTUREFINANCIAL STUDIESFINANCIAL SYSTEMFINANCIAL SYSTEMSFIXED COSTFORMAL FINANCIAL INSTITUTIONSFORMAL FINANCIAL SECTORFUTURE EARNINGSGDPGDP PER CAPITAGINI COEFFICIENTGOVERNMENT EXPENDITURESGREATER ACCESSGROWTH MODELSHEALTH SERVICESHIGH INTEREST RATESHOUSEHOLD INCOMEHOUSEHOLDSHOUSINGHUMAN CAPITALHUMAN DEVELOPMENTINCOME DISTRIBUTIONINCOME INEQUALITIESINCOME INEQUALITYINCOME LEVELSINCOME VARIABILITYINCOMESINDIVIDUAL INVESTORSINEFFICIENCYINFLATIONINFLATION RATEINFLATION RATESINFORMATION ASYMMETRIESINFORMATION ASYMMETRYINFORMATION ON BORROWERSINFORMATION SHARINGINFRASTRUCTURE DEVELOPMENTINSTITUTIONAL DEVELOPMENTINSTITUTIONAL ENVIRONMENTINSTITUTIONAL REFORMSINSTRUMENTINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL FINANCIAL STATISTICSJOB CREATIONJOB OPPORTUNITIESLABOR MARKETSLACK OF ACCESSLEGAL RIGHTSLEGAL SYSTEMLEGAL SYSTEMSLENDERLENDERSLIQUIDITYLOANLOAN-TO-DEPOSIT RATIOLORENZ CURVEM2M3MACROECONOMIC ENVIRONMENTMACROECONOMIC VARIABLESMACROECONOMICSMARKET CONSTRAINTSMARKET EFFICIENCYMARKET LIQUIDITYMARKET VALUEMICRO DATAMICROFINANCEMIDDLE-INCOME COUNTRIESMONETARY FUNDNET INTEREST MARGINOVERHEAD COSTOVERHEAD COSTSPER CAPITA INCOMEPOLITICAL ECONOMYPOOL OF BORROWERSPOVERTY ALLEVIATIONPRICE STABILITYPRIVATE CREDITPRIVATE PROPERTYPRIVATE SECTOR CREDITPROBABILITY OF REPAYMENTPROFITABILITYPROPERTY RIGHTPROPERTY RIGHTSPRUDENTIAL REQUIREMENTSREMITTANCESRESOURCE ALLOCATIONRETURNRISK DIVERSIFICATIONRISK SHARINGRULE OF LAWRURAL BANKRURAL BANK BRANCHESRURAL BANKSSAVINGSSHAREHOLDERSHAREHOLDER PROTECTIONSKILLED WORKERSSMALL ENTERPRISESSOCIAL BANKINGSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKET DEVELOPMENTSTOCK MARKET DEVELOPMENTSSTOCK MARKETSTRADE LIBERALIZATIONTRANSACTIONTRANSACTION COSTSTRANSPARENCYTURNOVERVILLAGESWAGE RATESWAGESWEALTHWORLD DEVELOPMENT INDICATORSWorld Bank10.1596/1813-9450-5915