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Deregulation, Bank Competition and Regional Growth

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Author Info
Santiago Carbó Valverdie
David Humphrey
Francisco Rodríguez Fernández

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Abstract

C ARBó V ALVERDE S., H UMPHREY D. B. and R ODRíGUEZ F ERNáNDEZ F. (2003) Deregulation, bank competition and regional growth, Reg. Studies 37 , 227-237. Cross-country studies suggest that countries with greater financial sector competition have higher rates of economic growth. However, it is difficult to "hold constant' different legal and cultural environments in these analyses, leading some to suggest that this relationship is due less to competition than to differing legal and cultural conditions which favour economic growth. As these differences are small within a country, an interregional analysis may reflect better the relationship between financial market competition and growth. We study five large regions in Spain over 1986-98. Using different indicators of market competition, we analyse changes in regional competition and growth. Granger-causality tests show that differences in competition are not associated with improved regional growth. Although deregulation raised deposit rates and lowered loan rates, these benefits have not markedly influenced regional growth. The positive relationship shown between competitive markets and growth in cross- country studies may instead be due to some unspecified third factor that influences both. C ARBó V ALVERDE S., H UMPHREY D. B. et R ODRí GUEZ F ERNáNDEZ F. (2003) La déréglementation, la concurrence interbancaire et la croissance régionale, Reg. Studies 37 , 227-237. Des études internationales laissent supposer que les pays où la concurrence interbancaire s'avère la plus vive jouissent des taux de croissance économique plus élevés. Cependant, il est difficile de maintenir divers milieux juridiques et culturels comme "facteurs constants' dans une telle analyse, ce qui incite certains à laisser supposer que ce rapport se doit moins à la concurrence qu'à des conditions juridiques et culturelles différentes et qui sont propices à la croissance économique. Etant donné que ces différences s'avèrent peu importantes au sein d'un pays, il se peut qu' une analyse menée sur le plan interrégional puisse mieux reflé ter le rapport entre la concurrence interbancaire et la croissance. Cinq grandes régions espagnoles sont étudiées entre 1986 et 1998. A partir des différents indicateurs de la concurrence du marché, on analyse la variation de la concurrence régionale et la croissance. Des tests de causalité du type Granger montrent que les différences de concurrence ne sont pas liées à une amélioration de la croissance ré gionale. Bien que la déréglementation ait fait augmenter les taux d'intérêt des dépôts bancaires et diminuer ceux des emprunts bancaires, ces avantages n'ont pas sensiblement influé sur la croissance régionale. Dans les études internationales, il se peut que le rapport étroit entre les marchés concurrentiels et la croissance s' explique plutôt par quelque troisième facteur non spécifié qui influe sur ces deux derniers. C ARBó V ALVERDE S., H UMPHREY D. B. und R ODRíGUEZ F ERNáNDEZ F. (2003) Wettbewerbsfreiheit, Wettbewerb im Bankwesen und regionales Wachstum, Reg. Studies 37 , 227-237. "Querlandein' durchgeführte Untersuchungen lassen vermuten, daß Länder mit scharferem Wettbewerb im Finanzsektor höhere Wachstumsraten in der Wirtschaft aufweisen Es ist jedoch schwierig, verschiedenartige rechtliche und kulturelle Umwelten in diesen Analysen " konstant zu halten', was manchen zu der Auffassung veranlaßt, daß diese Beziehung weniger auf Wettbewerb zurückzu-führen ist als auf unterschiedliche rechtliche und kulturelle Verhältnisse, die wirtschaftliches Wachstum begünstigen. Da diese Unterschiede innerhalb eines Landes nur gering sind, könnte eine überregionale Analyse der Beziehung zwischen Wachstum und Wettbewerb auf dem Finanzmarkt durchaus besser gerecht werden. Die Autoren untersuchen fünf große Regionen in Spanien im Zeitraum 1986-98. Mit Hilfe verschiedener Indikatoren des Wettbewerbs auf dem Markte werden Veränderungen im regionalen Wettbewerb und im Wachstum analysiert. Grangersche Kausalitätsüberprüfungen zeigen, daß Unterschiede beim Wettbewerb nicht mit verbessertem regionalen Wachstum zusammenhängen. Obschon Wettbewerbsfreiheit die Rate der Guthaben anhob und die der Anleihen herabsetzte, haben diese Vorteile das regionale Wachstum nicht merklich beinflußt. Die positive Beziehung, die zwischen miteinander im Wettbewerb stehenden Märkten und der Zunahme von "querlandein' Studien aufgezeigt wird, könnte stattdessen auf einen nicht spezifizierten dritten Faktor zurückzuführen sein, der beide beeinflußt.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 37 (2003)
Issue (Month): 3 (May)
Pages: 227-237
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Handle: RePEc:taf:regstd:v:37:y:2003:i:3:p:227-237

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Related research
Keywords: Deregulation; Market Competition; Regional Growth; Granger-causality;

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  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. Santiago Carbó Valverde & Francisco Rodríguez Fernández, 2005. "The determinants of bank margins revisited: A note on the effects of diversification," ThE Papers 05/11, Department of Economic Theory and Economic History of the University of Granada.. [Downloadable!]
  3. Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2006. "Theoretical and Methodological Study on Dynamic Growth Regions and Factors Explaining their Growth Performance," Papers DYNREG02, Economic and Social Research Institute (ESRI). [Downloadable!]
  4. Ardic, Oya Pinar & Damar, H. Evren, 2006. "Financial Sector Deepening and Economic Growth: Evidence from Turkey," MPRA Paper 4077, University Library of Munich, Germany, revised Nov 2006. [Downloadable!]
    Other versions:
  5. Santiago Carbó Valverde & Francisco Rodríguez Fernández, 2004. "The finance-growth nexus: a regional perspective," Economic Working Papers at Centro de Estudios Andaluces E2004/44, Centro de Estudios Andaluces. [Downloadable!]
  6. Judit Montoriol, 2006. "The Efect of Relationship Lending on Firm Performance," Working Papers 200605, Department of Business Economics, Universitat Autonoma de Barcelona. [Downloadable!]
  7. Carbo Valverde, Santiago & Fernández de Guevara y Rodoselovics, Juan & Humphrey, David & Maudos Villarroya, Joaquín, 2005. "Estimating the intensity of price and non-price competition in banking: an application to the Spanish case," MPRA Paper 15259, University Library of Munich, Germany. [Downloadable!]
  8. Mariarosaria Agostino & Francesco Trivieri, 2008. "Banking Competition and SMEs Bank Financing. Evidence from the Italian Provinces," Journal of Industry, Competition and Trade, Springer, vol. 8(1), pages 33-53, March. [Downloadable!] (restricted)
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