The paper "Does Economic Structure Determine Financial Structure", coauthored by Associate Professor Xian GU of the School of Finance, Franklin Allen, Laura Bartiloro and Oskar Kowalewski, was accepted by theJournal of International Economics.

Xian GU is currently an Associate Professor of finance at the School of Finance of the Central University of Finance and Economics, holding a Ph.D. in economics from Beijing Normal University. She is a postdoctoral fellow and a visiting Ph.D. student at the University of Pennsylvania, and she also is a researcher at the Faculty of Business of the Imperial College of London. Her research interests include corporate finance, banking and supervision. Her research papers have been published in theJournal of Banking and Finance,Journal of International Money and Finance, andOxford Handbook of Banking. Meanwhile her research papers were selected for International Conferences such as AEA, FMA, etc. For more information, please visit this webpage: http://ensf.cufe.edu.cn/szdw/fjs/105687.htm

Does Economic Structure Determine Financial Structure?

Xian GU

Journal of International Economics

Volume 114, September 2018, Pages 389-409

Abstract:In this paper, we examine the relationship between the structure of the real economy and a country's financial system. We consider whether the development of the real economic structure can predict the direction of evolution of a country's financial structure. Using data for 108 countries, we find a significant relationship between real economic structure and financial structure. Next, we exploit shocks to the economies in India, Finland and Sweden, and South Korea and show that changes in the economic structure of a country influence the evolution of its financial system. This suggests that financial institutions and capital markets change in response to the structure of industries.