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Determinants of banking outreach: An empirical assessment of Indian states

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  • Ghosh, Saibal

Abstract

The paper explores the factors influencing banking outreach. Using time series data on Indian states for 1973-2004, the analysis indicates a divergence across states in terms of the outreach of formal finance over time, ceteris paribus. The findings also uncover an important role of literacy and physical infrastructure. As well, the findings also point to the fact that the spread and use of banking services can be adversely affected by unfavorable labor regulations. Robustness tests reinforce these findings.

Suggested Citation

  • Ghosh, Saibal, 2011. "Determinants of banking outreach: An empirical assessment of Indian states," MPRA Paper 38650, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38650
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    References listed on IDEAS

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    1. R. Nagaraj & A. Varoudakis & M.-A. Véganzonès, 2000. "Long-run growth trends and convergence across Indian States," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(1), pages 45-70.
    2. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    3. Bhandari, Amit Kumar, 2009. "Access to Banking Services and Poverty Reduction: A State-wise Assessment in India," IZA Discussion Papers 4132, Institute for the Study of Labor (IZA).
    4. Georg R. G. Clarke & Lixin Colin Xu & Heng-fu Zou, 2006. "Finance and Income Inequality: What Do the Data Tell Us?," Southern Economic Journal, Southern Economic Association, vol. 72(3), pages 578-596, January.
    5. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
    6. Beck, Thorsten & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2007. "Reaching out: Access to and use of banking services across countries," Journal of Financial Economics, Elsevier, vol. 85(1), pages 234-266, July.
    7. Devashish Mitra & Beyza Ural, 2009. "Indian manufacturing: A slow sector in a rapidly growing economy," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(1), pages 205-205.
    8. Robin Burgess & Rohini Pande, 2005. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," American Economic Review, American Economic Association, vol. 95(3), pages 780-795, June.
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    10. Rana Hasan & Devashish Mitra & K.V. Ramaswamy, 2007. "Trade Reforms, Labor Regulations, and Labor-Demand Elasticities: Empirical Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 466-481, August.
    11. Kendall, Jake & Mylenko, Nataliya & Ponce, Alejandro, 2010. "Measuring financial access around the world," Policy Research Working Paper Series 5253, The World Bank.
    12. Nachane, D M & Ray, P & Ghosh, S, 2001. "Does monetary policy have differential state-level effects? an empirical evaluation," MPRA Paper 2708, University Library of Munich, Germany.
    13. S. Narayan, 2009. "India," Chapters,in: The Political Economy of Trade Reform in Emerging Markets, chapter 7 Edward Elgar Publishing.
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    Cited by:

    1. Ghosh, Saibal, 2009. "Does Financial Outreach Engender Economic Growth? Evidence from Indian States," MPRA Paper 32072, University Library of Munich, Germany.

    More about this item

    Keywords

    banking outreach; sub-national; India;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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