US banking deregulation and local economic growth: Direct effects and externalities

Pieter IJtsma, Sherrill Shaffer and Laura Spierdijk

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This study investigates the effects of banking deregulation on county-level economic growth in the U.S. during the 1970–2000 period. Our main contribution to the literature is that we analyze both the direct and external effects of banking deregulation on local economic growth. For the regions South, West and Northeast, we find significantly positive long-run direct effects of intrastate branching deregulation on the expected growth rates of counties in the deregulated state itself, up to several percentage points. We also establish significantly positive long-run external effects on the expected growth rates of counties adjacent to the deregulated state, up to several tenths of percentage points. We do not find such robust effects for interstate banking deregulation.

Keywords: U.S. banking deregulation; economic growth; externalities (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2019-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-his and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2019-80

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