Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19769
Authors: 
Hasan, Iftekhar
Koetter, Michael
Wedow, Michael
Year of Publication: 
2007
Series/Report no.: 
Discussion Paper, Series 2: Banking and Financial Supervision 2007,10
Abstract: 
We test whether output growth in European economic agglomeration regions depends on financial development. To this end we suggest a relative measure of the quality of financial institutions rather than the usual quantity proxy of financial development. In order to measure the quality of financial development we use profit efficiency derived from stochastic frontier analysis. We show that more efficient banks spur regional growth while the typically used quantity measure of financial development is negligible. Also, our results suggest an additional channel through which better banking can spur growth: the interaction of more credit with efficient banks.
Subjects: 
Bank performance
regional growth
bank efficiency
Europe
JEL: 
O47
O16
G21
O52
Document Type: 
Working Paper

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