Regional Bank Efficiency and its Effect on Regional Growth in Normal and Bad Times

Ulrich Haskamp (), Ralph Setzer and Ansgar Belke

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: The financial crisis affected regions in Europe in a different magnitude. We examine whether regions which incorporate banks with a higher intermediation quality grow faster using a sample which includes the aftermath of the financial crisis. We measure the intermediation quality of a bank by estimating a its profit and cost efficiency. Next, we aggregate the efficiencies of all banks within a NUTS 2 region to obtain a regional proxy for financial quality in twelve European countries. Our results show that relatively more profit efficient banks foster the economic growth in their region. The link between financial quality and growth is valid in normal times as well as in bad ones.

JEL-codes: G21 O47 O52 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ban, nep-eff and nep-ure
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Related works:
Journal Article: Regional bank efficiency and its effect on regional growth in “normal” and “bad” times (2016)
Working Paper: Regional Bank Efficiency and its Effect on Regional Growth in “Normal” and “Bad” Times (2015)
Working Paper: Regional bank efficiency and its effect on regional growth in 'normal' and 'bad' times (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112824

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