Convergence in solvency and capital centralization: A B‐VAR analysis for high‐income and euro area countries

We apply a B-VAR technique to 28 high-income coun-tries and 11 Euro area countries in 1999–2019 to analyze the causal relationships between centralization of capital measured in terms of network control and solvency condi-tions represented by the difference between GDP growth and interest rate. Results show a relationship that goes in two directions. First of all, divergent solvency conditions lead to an average increase in capital centralization and its greater convergence between countries. In turn, an average increase in capital centralization and its greater conver-gence produces a convergence of solvency conditions between countries. These outcomes are consistent for both groups of high-income countries and Euro area countries. Finally, in the group of high-income countries, we also note that an average deterioration in solvency conditions leads to a convergence of capital centralization between countries.