Summary

This is a broad cross-country assessment of the ties between financial structure - the mix of financial instruments, institutions, and markets in a given economy - and economic growth. Most studies focus on developed countries and compare bank-based and market-based systems. Debates over the relative merits of the two systems have relied on case studies of Germany, Japan, the United Kingdom, and the United States, countries with similar long-run growth rates. The absence of data on developing countries limits the usefulness of such studies for policy makers.