Financial integration and credit democratization: Linking banking deregulation to economic growth

Elizabeth A. Berger, Alexander Butler, Edwin Hu and Morad Zekhnini

Journal of Financial Intermediation, 2021, vol. 45, issue C

Abstract: We use a matching method that constructs synthetic counterfactual states to identify the channels that link bank deregulation to financial integration, and thereby to economic growth. We document a positive, but conditional, effect of financial integration on economic growth. We explore the heterogeneous effects of financial integration across states depending on the capital mobility in each state. Our results reveal a correlation between financial integration and subsequent banking sector changes related to an expansion in loan recipients. We show that financial integration democratizes lending and spurs economic growth.

Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:45:y:2021:i:c:s1042957320300115

DOI: 10.1016/j.jfi.2020.100857

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