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Promoção do Setor Financeiro como Estratégia de Desenvolvimento Regional – O Caso do Nordeste Brasileiro

Author

Listed:
  • Alexandre Rands Barros

    (Universidade Federal de Pernambuco)

  • Renata Caldas

    (Datamétrica Consultoria, Pesquisa e Telemarketing)

Abstract

In Brazil, the inequality in regional development is very high and points to the Northeast as the region most affected, not only because of income inequality, education, social capital etc., but also by the inequality of the financial system. This article uses longitudinal data for the cities between 2000 and 2007 to test two main hypotheses: finance development contributes to economic growth in Northeast, as it does nationally and even internationally, and there is some bias against Northeastern counties in decisions to install bank branches. The tests rely on Barro and Sala-i-Martin (1992) standard growth regressions. The results confirm both hypotheses. As a result, the article argues that policies can contribute to the regional finance development and thus help fight the regional inequalities in Brazil. A first development strategy suggested is the elimination of bias in the installation of branches. Moreover, it is also suggested regionalization of reserve requirements and the IOF for the poorest cities in the Northeast and differentiation of the payment to the agencies in smaller cities by the Federal Government service.

Suggested Citation

  • Alexandre Rands Barros & Renata Caldas, 2011. "Promoção do Setor Financeiro como Estratégia de Desenvolvimento Regional – O Caso do Nordeste Brasileiro," Working Papers 56, Datamétrica Consultoria Econômica, revised 2011.
    • Handle: RePEc:dtm:wpaper:56
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    Keywords

    Bank agency. Regional inequality. Financial system.;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • 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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