Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/211976
Year of Publication: 
2004
Series/Report no.: 
Bank of Finland Discussion Papers No. 8/2004
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We seek to contribute to both the finance-growth literature and the community banking literature by testing the effects of the relative health of community banks on economic growth and investigating potential transmission mechanisms for these effects using data from 1993- 2000 on 49 nations.Data from both developed and developing nations suggest that larger market shares and higher efficiency rankings for small, private, domestically owned banks are associated with better economic performance, and that the marginal benefits of larger shares are greater when the banks are more efficient.Only mixed support is found for hypothesized transmission mechanisms through improved financing for SMEs or greater overall bank credit flows.The data from developing nations is also consistent with favourable economic effects from foreign-owned banks, but unfavourable effects from state-owned banks.
Subjects: 
banks
community banking
SMEs
financial development
economic growth
international
JEL: 
G21
G28
G34
F36
Persistent Identifier of the first edition: 
ISBN: 
952-462-128-2
Document Type: 
Working Paper

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