Authors
Sebnem Kalemli‐Ozcan, Elias Papaioannou, Jose‐Luis Peydro
Publication date
2013/6
Journal
The Journal of Finance
Volume
68
Issue
3
Pages
1179-1228
Description
We analyze the impact of financial globalization on business cycle synchronization using a proprietary database on banks’ international exposure for industrialized countries during 1978 to 2006. Theory makes ambiguous predictions and identification has been elusive due to lack of bilateral time‐varying financial linkages data. In contrast to conventional wisdom and previous empirical studies, we identify a strong negative effect of banking integration on output synchronization, conditional on global shocks and country‐pair heterogeneity. Similarly, we show divergent economic activity due to higher integration using an exogenous de‐jure measure of integration based on financial regulations that harmonized EU markets.
Total citations
Scholar articles
S Kalemli‐Ozcan, E Papaioannou, JL Peydro - The Journal of Finance, 2013