Further Evidence on the Link between Finance and Growth : An International Analysis of Community Banking and Economic Performance
The authors contribute to both the finance-growth literature and the community banking literature by testing the effects of the relative health of community banks on economic growth, and investigating potential transmission mechanisms for these eff...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/08/2483262/further-evidence-link-between-finance-growth-international-analysis-community-banking-economic-performance http://hdl.handle.net/10986/18128 |
| Summary: | The authors contribute to both the
finance-growth literature and the community banking
literature by testing the effects of the relative health of
community banks on economic growth, and investigating
potential transmission mechanisms for these effects using
data from 1993-2000 on 49 nations. Data from both industrial
and developing nations suggest that greater market shares
and efficiency ranks of small, private, domestically-owned
banks are associated with better economic performance, and
that the marginal benefits of higher shares are greater when
the banks are more efficient. Only mixed support is found
for hypothesized transmission mechanisms through improved
financing for small and medium enterprises or greater
overall bank credit flows. Data from developing nations are
also consistent with favorable economic effects of
foreign-owned banks, but unfavorable effects from
state-owned banks. |
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