Journal Article

New Empirical Evidence on Local Financial Development and Growth

Letters in Spatial and Resource Sciences, 1(2–3): 147–157

In this paper, we show that the regional finance-growth nexus in Italy is robust to a series of innovations with respect to the existing literature on the topic. We use finer measures of economic and financial development, as well as instruments with a deeper economic content. We rely on state-of-the-art cross-sectional and panel estimation methods, and we offer a thorough investigation of the nonlinearities in the relation between finance and growth. Our results show that, while local financial development is a key factor for economic growth, in regions with inefficient courts more credit might translate into reduced growth due to opportunistic behaviour and the consequent misallocation of funds.

Autoren

Roberto Patuelli
Andrea Vaona

Info

Erscheinungsdatum
JEL Classification
O18, O16, C31
DOI
10.1007/s12076-008-0014-4