Banking market structure, financial dependence and growth: international evidence from industry data

Nicola Cetorelli and Michele Gambera

No WP-99-8, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: This paper explores the empirical relevance of banking market structure on growth. There is substantial evidence of a positive relationship between the level of development of the banking sector of an economy and its long-run output growth. Little is known, however, about the role played by the market structure of the banking sector on the dynamics of capital accumulation. This paper provides evidence that bank concentration promotes the growth of those industrial sectors that are more in need of external finance by facilitating credit access to younger firms. However, we also find evidence of a general depressing effect on growth associated with a concentrated banking industry, which imparts all sectors and all firms indiscriminately.

Keywords: Bank management; Banking market (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (44)

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Related works:
Journal Article: Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data (2001)
Working Paper: Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data (1999)
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