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Bank restructuring and regional economic growth in Spain. Are branches still relevant?

Author

Listed:
  • Cruz-García, Paula

    (Universitat de València)

  • Peiró-Palomino, Jesús

    (Universitat de València)

Abstract

The restructuring process of the Spanish banking sector initiated after the Great Recession of 2008 has led to a dramatic reduction in the number of bank branches. This paper analyzes the impact of branch closures on GDP per capita, labor productivity and employment per capita of the Spanish provinces in the period 2008–2018. The results show that bank branches have only a weak impact on employment, and no effect on productivity and GDP per capita. Therefore, if consumption and investment decisions of families and firms are affected by branch closures, the impact is not transferred to aggregate regional performance.

Suggested Citation

  • Cruz-García, Paula & Peiró-Palomino, Jesús, 2025. "Bank restructuring and regional economic growth in Spain. Are branches still relevant?," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 62, pages 119-146.
    • Handle: RePEc:ris:invreg:0571
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    More about this item

    Keywords

    Bank restructuring; branches; economic growth; Spanish provinces;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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