Financial market development and bank deposits
研究金融市场发展对银行存款的影响，发现发达国家中市场与银行互补促进存款增长，而发展中国家两者竞争抑制存款，且受市场集中度和存款保险等国情因素影响。
• Financial market development shapes bank deposits differently across countries. • In developed economies, markets complement banks and boost deposit growth. • In developing economies, markets compete with banks, shaped by local conditions. • Market development raises savings, further supporting deposit growth. This paper studies the effects of financial market development on bank deposits in a cross-country setting. Our empirical evidence shows that investors in developed and developing economies engage with financial markets differently, leading to varying impacts on bank deposits. For instance, in financially developed economies, financial markets typically complement the banking sector by facilitating deposit growth. Conversely, in financially developing economies, financial markets and banks often compete for deposits, thereby constraining bank deposits growth. This dynamic, however, is shaped by country-specific factors such as market concentration and the level of deposit insurance. Moreover, we find that financial market development increases per capita savings, which in turn strengthens bank deposit growth. These findings remain consistent across a range of model specifications and robustness checks.