Patience and financial development

Abstract

Norms, behaviors, beliefs, and preferences have been accepted as some of the most important determinants of financial development. In this paper, as a contribution to the literature, we ask whether patience plays a role in promoting financial development. Our cross-country empirical results show that patience is positively and significantly associated with financial development. Our results are quite robust for stock market development. However, the effect of patience on banking sector development loses its significance once the quality of institutions is controlled. Our results imply that patience has more direct and decisive effects on stock market development.