Financial Deepening and Business Creation: A Regional Analysis of Colombia

Jose Cao-Alvira and Lorena A. Palacios-Chacón

Emerging Markets Finance and Trade, 2021, vol. 57, issue 3, 875-890

Abstract: Focusing on the individual regions of Colombia, we analyze the depth of the country’s financial sector and its incidence over business creation and economic growth. Financial deepening, measured by the ratio of time deposits to GDP and by the ratio of commercial bank loans to GDP, consistently shows a positive and significant relationship with business creation across the Colombian regions. These findings are also present when extending our analysis to study the impact of financial deepening on enterprise creation by industrial sectors. Lastly, regional new enterprise creation is found to be positively correlated with regional economic growth.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:57:y:2021:i:3:p:875-890

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DOI: 10.1080/1540496X.2019.1602764

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