Do Financial Systems Converge?

Review of International Economics, Forthcoming

Posted: 4 Jun 2009 Last revised: 10 Mar 2011

See all articles by Angelos A. Antzoulatos

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management

Ekaterini Panopoulou

Essex Business School

Chris Tsoumas

Hellenic Open University

Multiple version iconThere are 2 versions of this paper

Date Written: May 5, 2010


We apply the new panel convergence methodology developed by Phillips and Sul (Econometrica, 2007) on thirteen financial development indices from the World Bank’s Financial Development and Structure database, to test for financial system convergence across a large set of industrial and developing countries. Our results indicate that there is no convergence for either the financial systems as a whole or their major segments. Far from decreasing, the differences in the financial systems of the sample countries seemingly persist over time. These differences are more pronounced for the stock market segment and private credit by banks and less so for the bond market segment. Moreover, the convergent clubs for most indices transcend the distinction between industrial vs. developing countries.

Keywords: Financial system development, Structure, Convergence, Transition curve

JEL Classification: G10, G20, C32, C33

Suggested Citation

Antzoulatos, Angelos A. and Panopoulou, Ekaterini and Tsoumas, Chris, Do Financial Systems Converge? (May 5, 2010). Review of International Economics, Forthcoming, Available at SSRN:

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR

Ekaterini Panopoulou

Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Chris Tsoumas (Contact Author)

Hellenic Open University ( email )

Parodos Aristotelous 18
26335 Patra


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