Banking Deregulation and Growth: A Reappraisal

Iryna Stewen

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: This paper builds on a large literature that has exploited the experiment of US bank branching and inter-state banking deregulation since the 1970s as a natural laboratory that allows to study the real effects of liberalization and financial integration. Whereas most of the literature presented sizable effects of intra-state deregulation on a wide range of economic outcomes, interstate deregulation has generally been found to be much less important. Exploring the interaction between financial development, financial integration and long-term growth we suggest that it is the state-specific chronological order between inter-state banking and intra-state branching deregulations that has interesting implications for the patterns of growth and industrial structure. On the one hand, intra-state branching deregulation was especially important in states that had not yet deregulated their interstate banking regime and for the manufacturing sector. On the other hand, abolishing inter-state banking restrictions had a pronounced effect in states that integrated prior to intrastate branching deregulation and for the financial sector.

JEL-codes: F36 G21 O47 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145586

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