The authors would like to thank Florian Peters, Joseph McCahery and Zacharias Sautner for useful suggestions. Finally the authors would like to thank the editors and referees for helpful comments.
The Impact of Multinationals on the Size of the Banking System
Article first published online: 12 JUL 2013
© 2013 John Wiley & Sons Ltd
Volume 66, Issue 3, pages 378–397, August 2013
How to Cite
Schoenmaker, D. and Werkhoven, D. (2013), The Impact of Multinationals on the Size of the Banking System. Kyklos, 66: 378–397. doi: 10.1111/kykl.12027
- Issue published online: 12 JUL 2013
- Article first published online: 12 JUL 2013
After the global financial crisis, the size of the banking sector has become a hotly debated topic. To measure the size of the banking system a country's banking assets divided by the country's gross domestic product (GDP) is commonly applied as a general yardstick. This paper shows that this yardstick does not take into account differences in financial needs. In particular, countries differ with regard to the number and size of multinational enterprises. In a cross-country empirical study, we find a statistically significant relationship between the presence of large banks and the presence of multinationals, after controlling for the size of the country. That is why we develop an additional specific yardstick for firm specific financial needs.