Financial Integration and Credit Democratization: Linking Banking Deregulation to Economic Growth

65 Pages Posted: 2 Sep 2012 Last revised: 13 Jan 2020

See all articles by Elizabeth Berger

Elizabeth Berger

Cornell University

Alexander W. Butler

Rice University - Jesse H. Jones Graduate School of Business

Edwin Hu

U.S. Securities and Exchange Commission - Division of Economic and Risk Analysis

Morad Zekhnini

Tulane University

Date Written: January 10, 2020

Abstract

We use a matching method that constructs synthetic counterfactual states to identify the channels that link bank deregulation to financial integration, and thereby to economic growth. We document a positive, but conditional, effect of financial integration on economic growth. We explore the heterogeneous effects of financial integration across states depending on the capital mobility in each state. Our results reveal a correlation between financial integration and subsequent banking sector changes related to an expansion in loan recipients. We show that financial integration democratizes lending and spurs economic growth.

Suggested Citation

Berger, Elizabeth and Butler, Alexander W. and Hu, Edwin and Zekhnini, Morad, Financial Integration and Credit Democratization: Linking Banking Deregulation to Economic Growth (January 10, 2020). Available at SSRN: https://ssrn.com/abstract=2139679 or http://dx.doi.org/10.2139/ssrn.2139679

Elizabeth Berger

Cornell University ( email )

Ithaca, NY 14853
United States

Alexander W. Butler (Contact Author)

Rice University - Jesse H. Jones Graduate School of Business ( email )

MS 531
Houston, TX 77005
United States
713-348-6341 (Phone)

HOME PAGE: http://www.owlnet.rice.edu/~awbutler/

Edwin Hu

U.S. Securities and Exchange Commission - Division of Economic and Risk Analysis ( email )

United States Securities and Exchange Commission
100 F St NE
Washington, DC 20549
United States

Morad Zekhnini

Tulane University ( email )

A.B. Freeman School of Business
7 McAlister Drive
New Orleans, LA 70118
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
424
Abstract Views
2,347
rank
70,737
PlumX Metrics