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Bank branching and economic development: A Bayesian quantile regression approach

Author

Listed:
  • Maria Teresa Balaguer-Coll

    (Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain)

  • Lorenzo Caldirola

    (Department of Statistics and Operational Research, Universidad de Valencia, Spain)

  • David Conesa

    (Department of Statistics and Operational Research, Universidad de Valencia, Spain)

  • Rodrigo Cuenca De Armas

    (Department of Economics, Universitat Jaume I, Castellón, Spain)

  • Emili Tortosa-Ausina

    (IVIE, Valencia and IIDL and Department of Economics, Universitat Jaume I, Castellón, Spain)

Abstract

The article discusses the impact of physical bank branches on economic growth and the importance of considering this impact in a global context. Despite the rise of internet banking, physical access to essential goods and services remains crucial. Studies have shown a link between financial development, physical bank presence, and economic growth, but these studies have mostly been limited to single-country analyses, or lower territorial jurisdictions. To extend this research, we consider a large sample of countries and employ a Bayesian quantile regression approach to assess the varying impacts of bank branching on development. This method allows for an evaluation of whether the effects differ for poorer and richer regions. Results show that the stage of development is critical when assessing the impact of bank branch networks on development, and that the link is particularly weak in some geographical areas.

Suggested Citation

  • Maria Teresa Balaguer-Coll & Lorenzo Caldirola & David Conesa & Rodrigo Cuenca De Armas & Emili Tortosa-Ausina, 2025. "Bank branching and economic development: A Bayesian quantile regression approach," Working Papers 2025/08, Economics Department, Universitat Jaume I, Castellón (Spain).
    • Handle: RePEc:jau:wpaper:2025/08
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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