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More Bankers, More Growth? Evidence from OECD Countries

Author

Listed:
  • Gunther Capelle-Blancard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Claire Labonne

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We re-examine empirically the finance–growth relationship. We argue that financial deepening should not only be assessed via the familiar measures of financial activity output—the volume of credit—but also through its inputs—for example, the relative number of employees in the financial industry—or the efficiency of the financial-intermediation process. The latter is measured in this paper by the ratio of credit volume to the number of financial-sector employees. We compare these measures using the econometric approach recommended by Roodman (2009). Overall, we fail to find a positive relationship between financial deepening and economic growth in OECD countries over the last 40 years.

Suggested Citation

  • Gunther Capelle-Blancard & Claire Labonne, 2016. "More Bankers, More Growth? Evidence from OECD Countries," PSE-Ecole d'économie de Paris (Postprint) hal-01297090, HAL.
    • Handle: RePEc:hal:pseptp:hal-01297090
    DOI: 10.1111/ecno.12051
    Note: View the original document on HAL open archive server: https://hal.science/hal-01297090v1
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    References listed on IDEAS

    as
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