Bank branching and economic development: A Bayesian quantile regression approach

Maria Teresa Balaguer-Coll (), Lorenzo Caldirola (), David Conesa (), Rodrigo Cuenca De Armas () and Emili Tortosa-Ausina
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Maria Teresa Balaguer-Coll: Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain
Lorenzo Caldirola: Department of Statistics and Operational Research, Universidad de Valencia, Spain
David Conesa: Department of Statistics and Operational Research, Universidad de Valencia, Spain
Rodrigo Cuenca De Armas: Department of Economics, Universitat Jaume I, Castellón, Spain

No 2025/08, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: The article discusses the impact of physical bank branches on economic growth and the importance of considering this impact in a global context. Despite the rise of internet banking, physical access to essential goods and services remains crucial. Studies have shown a link between financial development, physical bank presence, and economic growth, but these studies have mostly been limited to single-country analyses, or lower territorial jurisdictions. To extend this research, we consider a large sample of countries and employ a Bayesian quantile regression approach to assess the varying impacts of bank branching on development. This method allows for an evaluation of whether the effects differ for poorer and richer regions. Results show that the stage of development is critical when assessing the impact of bank branch networks on development, and that the link is particularly weak in some geographical areas.

Keywords: Bank branches; Financial development; Economic growth; Quantile regression (search for similar items in EconPapers)
JEL-codes: C23 G21 O16 O47 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2025
New Economics Papers: this item is included in nep-fdg and nep-pay
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