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Banks´ Inefficiency and Economic Growth A Micro-Macro Approach

  • Riccardo Lucchetti

    (Department of Economics, University of Ancona)

  • Luca Papi

    (Department of Economics, University of Ancona)

  • Alberto Zazzaro

    (Department of Economics, University of Ancona)

This paper offers a methodological contribution to the empirical analysis of the relationships 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 the banks’ allocative activity. 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.

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Paper provided by Centro Studi Luca d'Agliano, University of Milano in its series Development Working Papers with number 153.

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Date of creation: 01 May 2001
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Handle: RePEc:csl:devewp:153
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