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Banks' Inefficiency and Economic Growth: A Micro-Macro Approach

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Author Info
Lucchetti, Riccardo
Papi, Luca
Zazzaro, Alberto

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Abstract

This paper offers a methodological contribution to the empirical analysis of the relationship between banking and economic growth by suggesting a new indicator for the state of development of the banking system based on a measure of bank microeconomic efficiency. This choice helps to overcome the problem of causality and to capture the effects of banks' activity on growth. This new approach is then applied to analyse the relationship between the banking system and economic growth in the Italian regions, through a dynamic panel technique. The empirical results show the existence of an independent effect exerted by the efficiency of banks on regional growth. Copyright 2001 by Scottish Economic Society.

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Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 48 (2001)
Issue (Month): 4 (September)
Pages: 400-424
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Handle: RePEc:bla:scotjp:v:48:y:2001:i:4:p:400-424

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hasan, Iftekhar & Koetter , Michael & Wedow, Michael, 2009. "Regional growth and finance in Europe: Is there a quality effect of bank efficiency?," Research Discussion Papers 13/2009, Bank of Finland. [Downloadable!]
    Other versions:
  2. Abdul Qayyum & Sajawal Khan, 2006. "X-efficiency, Scale Economies, Technological Progress, and Competition: The Banking Sector in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 733-748. [Downloadable!]
  3. Paola Dongili, 2005. "Interdipendenza fra sistema reale e finanziario: una rilettura alla luce dell’insegnamento del prof. Menegazzi," Working Papers 29, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
  4. Qayyum, Abdul & Khan, Sajawal, 2006. "X-efficiency, scale economies, Technological Progress and Competition of Pakistani’s banks," MPRA Paper 2654, University Library of Munich, Germany, revised 2006. [Downloadable!]
  5. Angelo Zago & Francesco Aiello & Camilla Mastromarco, 2008. "Be productive or face decline. On the sources and determinants of output growth in Italian manufacturing firms," Working Papers 46, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
  6. Paola Dongili & Angelo Zago, 2005. "Bad loans and efficiency in Italian Banks," Working Papers 28, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
  7. Abdul Qayyum & Sajawal Khan, 2007. "X-efficiency, Scale Economies, Technological Progress and Competition: A Case of Banking Sector in Pakistan," PIDE-Working Papers 2007:23, Pakistan Institute of Development Economics. [Downloadable!]
  8. Paola Dongili, 2005. "La definizione del prodotto delle banche," Working Papers 21, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
  9. Koetter, Michael & Wedow, Michael, 2005. "Finance and growth in a bank-based economy: is it quantity or quality that matters?," Discussion Paper Series 2: Banking and Financial Studies 2006,02, Deutsche Bundesbank, Research Centre. [Downloadable!]
  10. Hasan, Iftekhar & Wang, Haizhi & Zhou, Mingming, 2009. "Do better institutions improve bank efficiency? Evidence from a transitional economy," BOFIT Discussion Papers 28/2008, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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