Finance and Oil. Is there a Resource Curse in Financial Development?

T.H.L. Beck

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Abstract

This paper shows that the finance and growth relationship is as important in resource-based economies as in other economies. This paper also documents less developed financial systems in resource-based economies and banks that are more liquid, better capitalized and more profitable, but give fewer loans to firms. Firms in resource-based economies use less external finance and a smaller share of them uses bank loans, although there is the same level of demand as in other countries, thus pointing to supply constraints. Overall, there is some indication of a natural resource curse in financial development, which falls more on enterprises than on households. This calls for intensified efforts in resource-based economies to deepen and broaden financial systems.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Volume2011-017
Publication statusPublished - 2011

Publication series

NameCentER Discussion Paper
Volume2011-017

Keywords

  • Financial Development
  • Natural Resource Curse

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    Beck, T. H. L. (2011). Finance and Oil. Is there a Resource Curse in Financial Development? (CentER Discussion Paper; Vol. 2011-017). Economics.