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Do formal and informal institutions shape the influence of sustainable banking on financial development?

Author
Úbeda Mellina, Fernandountranslated; Forcadell, Francisco Javier; Suárez Suárez, Nuriauntranslated
Entity
UAM. Departamento de Financiación e Investigación Comercial
Publisher
Elsevier
Date
2021-08-18
Citation
Finance Research Letters 46. Part B (2022): 102391
ISSN
1544-6123
DOI
10.1016/j.frl.2021.102391
Funded by
The authors acknowledge financial support from the Spanish Ministry of Economy and Competitiveness, Project RTI2018-097447-B-I00 and PID2020-118064GB-I00, and from the Professorship Excellence Program in accordance with the multi-year agreement signed by the Government of Madrid and the Autonoma University of Madrid (Line #3)
Project
Gobierno de España. RTI2018-097447-B-I00; Gobierno de España. PID2020-118064GB-I00
Editor's Version
https://doi.org/10.1016/j.frl.2021.102391
Subjects
Culture; Financial development; Formal and informal institutions; Reputation; Sustainable banking; Trust; Economía
URI
http://hdl.handle.net/10486/700718
Rights
© 2021 The Authors

Licencia de Creative Commons
Esta obra está bajo una licencia de Creative Commons Reconocimiento-NoComercial-SinObraDerivada 4.0 Internacional.

Abstract

This paper explores the moderating role of formal and informal institutions on the sustainable banking and financial development link. We compute an aggregated measure of sustainability in the banking sector for a sample of 46 countries for the period 2010-2018. Our results indicate that sustainable banking positively influences financial development only in countries with strong formal institutions. Nevertheless, informal institutions can generate the necessary trust in the banking sector, allowing the positive effect of sustainable banking on financial development in countries with weak formal institutions. The results are robust after controlling the potential endogeneity issues
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Google™ Scholar:Úbeda Mellina, Fernando - Forcadell, Francisco Javier - Suárez Suárez, Nuria

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