National Preferences for Bank or Market Financing
Abstract: This article examines the reasons some countries favor bank-based financial systems and others favor markets-based financial systems. We show that when societies are more accepting of ambiguity?and by extension are more trusting?market financing is favored over relationship-based collateral financing by banks.
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Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2016
Order Number: 04