Banks' Inefficiency and Economic Growth: A Micro-Macro Approach

Development Studies Working Paper No. 153

26 Pages Posted: 4 Nov 2001

See all articles by Luca Papi

Luca Papi

Polytechnic University of Marche - Faculty of Economics

Riccardo Lucchetti

University Polytechnic of the Marches - Faculty of Economics

Alberto Zazzaro

Polytechnic University of Marche - Faculty of Economics

Date Written: May 2001

Abstract

This paper offers a methodological contribution to the empirical analysis of the relationships between banking and economic growth by suggesting a new indicator for the state of development of the banking system based on a measure of bank microeconomic efficiency. This choice helps to overcome the problem of causality and to capture the effects of the banks' allocative activity. This new approach is then applied to analyse the relationship between the banking system and economic growth in the Italian regions, through a dynamic panel technique. The empirical results show the existence of an independent effect exerted by the efficiency of banks on regional growth.

Keywords: Bank efficiency, Regional growth

JEL Classification: O40, G21, C33

Suggested Citation

Papi, Luca and Lucchetti, Riccardo and Zazzaro, Alberto, Banks' Inefficiency and Economic Growth: A Micro-Macro Approach (May 2001). Development Studies Working Paper No. 153, Available at SSRN: https://ssrn.com/abstract=288802 or http://dx.doi.org/10.2139/ssrn.288802

Luca Papi (Contact Author)

Polytechnic University of Marche - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy
+39 71 2207083 (Phone)

Riccardo Lucchetti

University Polytechnic of the Marches - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy

Alberto Zazzaro

Polytechnic University of Marche - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy

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