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The evolution of financial intermediation: Evidence from 19th‐century Ontario microdata

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  • Livio Di Matteo
  • Angela Redish

Abstract

Microdata for Ontario decedents in 1892 and 1902 is analyzed to help explain the dramatic growth of the Canadian banking system in the late 19th century. Combining data from probate inventories with census data at the township level, we find that the expansion of deposit banking happened at the extensive rather than intensive margin and was correlated with the expansion of the branch network of the banking system, although we cannot assign causation. Wealth and urbanization help to explain the growth of deposit banking but the significance of a dummy variable for 1902 points to other time‐correlated factors such as innovations in transportation and financial innovations that lowered costs and facilitated access to banking services. L'évolution de l'intermédiation financière : résultats à partir de micro‐données pour l'Ontario au 19ê siècle. Les auteurs analysent les micro‐données pour les personnes décédées en Ontario en 1892 et en 1902 pour tenter d'expliquer la croissance dramatique du système bancaire canadien à la fin du 19e siècle. En combinant des données provenant d'inventaires après décès avec celles de recensements au niveau des cantons, on découvre que l'expansion du système bancaire va se produire à la marge extensive plutôt qu'à la marge intensive, et être co‐reliée à l'expansion du réseau de succursales du système bancaire – encore qu'on ne puisse assigner un lien de causalité. Richesse et urbanisation aident à expliquer la croissance des banques de dépôts, mais la signification de la variable fictive pour 1902 pointe vers des facteurs comme l'innovation dans le transport et l'innovation financière qui ont réduit les coûts et facilité l'accès aux services bancaires.

Suggested Citation

  • Livio Di Matteo & Angela Redish, 2015. "The evolution of financial intermediation: Evidence from 19th‐century Ontario microdata," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(3), pages 963-987, August.
    • Handle: RePEc:wly:canjec:v:48:y:2015:i:3:p:963-987
    DOI: 10.1111/caje.12165
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    Cited by:

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    2. Oscar Gelderblom & Joost Jonker & Ruben Peeters & Amaury de Vicq, 2023. "Exploring modern bank penetration: Evidence from early twentieth‐century Netherlands," Economic History Review, Economic History Society, vol. 76(3), pages 892-916, August.

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