UnissResearch

Logo Universitàegli studi di Sassari
titoli, abstracts, parole chiave >>>
Does local financial development matter?

Guiso, Luigi and Sapienza, Paola and Zingales, Luigi (2004) Does local financial development matter? The Quarterly Journal of Economics, Vol. 119 (3), p. 929-969. eISSN 1531-4650. Article.

[img]
Preview
Full text disponibile come PDF Richiede visualizzatore di PDF come GSview, Xpdf o Adobe Acrobat Reader
774Kb

DOI: 10.1162/0033553041502162

Abstract

We study the effects of differences in local financial development within an integrated financial market. We construct a new indicator of financial development by estimating a regional effect on the probability that, ceteris paribus, a household is shut off from the credit market. By using this indicator, we find that financial development enhances the probability an individual starts his own business, favors entry of new firms, increases competition, and promotes growth. As predicted by theory, these effects are weaker for larger firms, which can more easily raise funds outside of the local area. These effects are present even when we instrument our indicator with the structure of the local banking markets in 1936, which, because of regulatory reasons, affected the supply of credit in the following 50 years. Overall, the results suggest local financial development is an important determinant of the economic success of an area even in an environment where there are no frictions to capital movements.

Item Type:Article
ID Code:2824
Status:Published
Refereed:Yes
Uncontrolled Keywords:Financial market, financial development, credit market
Subjects:Area 13 - Scienze economiche e statistiche > SECS-P/01 Economia politica
Divisions:001 Università di Sassari > 01 Dipartimenti > Economia, impresa, regolamentazione
Publisher:MIT Press
eISSN:1531-4650
Copyright Holders:© 2004 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Publisher Policy:Depositato in conformità con la politica di copyright dell'Editore
Deposited On:25 Aug 2009 17:14

I documenti depositati in UnissResearch sono protetti dalle leggi che regolano il diritto d'autore

Repository Staff Only: item control page