Local growth and access to credit: Theory and evidence

Boubacar Diallo () and Omar Al-Titi

Journal of Macroeconomics, 2017, vol. 54, issue PB, 410-423

Abstract: We theoretically and empirically investigate the effects of access to credit on local growth using a Schumpeterian growth model and assuming monopolistic competition between differentiated products of the banking system. We show that access to credit exerts a positive effect on local economic growth. To validate the theoretical prediction we use data on firms and bank branches from 18 emerging European economies.

Keywords: Schumpeterian growth; Access to credit; Monopolistic competition; Eastern europe (search for similar items in EconPapers)
JEL-codes: C21 C23 G21 O16 O3 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:54:y:2017:i:pb:p:410-423

DOI: 10.1016/j.jmacro.2017.07.005

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