Dissertations, Theses, and Capstone Projects

Date of Degree

6-2026

Document Type

Doctoral Dissertation

Degree Name

Doctor of Philosophy

Program

Economics

Advisor

Christos Giannikos

Committee Members

Sebastiano Manzan

Wim Vijverberg

Subject Categories

Finance and Financial Management | Portfolio and Security Analysis

Keywords

Stock Market Concentration, Stock Market Structure, Systemic Vulnerability, Financial Derivatives, Wealth Inequality, Income Inequality

Abstract

This dissertation examines the macroeconomic and distributional consequences of financial market structure and innovation across three empirical chapters. The first chapter provides the first cross-country evidence that stock market concentration significantly increases the likelihood of systemic banking crises, using a panel of 30 countries from 1998 to 2020 and a correlated random effects probit model with a control-function approach. Channel analysis identifies market size and credit depth as key transmission mechanisms. The second chapter investigates the link between stock market concentration and income inequality across 36 countries from 1989 to 2021, finding a robust positive association with the Gini coefficient and top income shares, alongside a U-shaped relationship between financial development and inequality. The third chapter examines the effect of financial derivatives on wealth inequality using data from the Bank for International Settlements and the World Inequality Database for 15 countries from 2001 to 2021, showing that derivatives activity raises the Wealth Gini coefficient and disproportionately increases the wealth shares of the top 1% and top 10%, while foreign exchange derivatives negatively affect the bottom 50%. Taken together, the results demonstrate that the structure and instruments of modern financial markets actively shape systemic fragility and economic inequality, with important implications for macroprudential policy and the governance of capital markets.

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