Banks, Financial Innovations and Regional Growth (download PDF 244 Kb)

Santiago Carbó Valverde, Rafael López del Paso and Francisco Rodríguez Fernández

Abstract
There is a well-documented cross-country literature on the relationship between finance and growth. This paper contributes to this literature by analysing the relationships between financial intermediation and economic growth within the regions of one country, rather than different countries. The focus on regions is relevant since regional information is more homogeneous, the legal and institutional factors are similar, and the relevant financial market is more accurately defined. Our study also incorporates the effects of a set of innovations in the banking sector on the regional growth. The empirical analysis is undertaken for the Spanish regions over 1986-2001.

JEL Classification: G21, R11
Keywords : financial intermediation, economic growth, regions.