Banking Integration and Growth: Role of Banks' Previous Industry Exposure

65 Pages Posted: 16 Jul 2015 Last revised: 21 Jul 2017

Neslihan Dincbas

HEC Paris - Finance Department

Tomasz Kamil Michalski

HEC Paris - Economics & Decision Sciences

Evren Ors

HEC Paris - Finance Department

Date Written: July 4, 2017

Abstract

Using U.S. interstate banking deregulations, we identify the effect of banks’ prior to market-entry industry exposures on the state-level manufacturing sector growth. Examining industry value added, gross operating surplus, total compensation, number of employees, output per employee and wages, we find that the larger the discrepancy in specialization in an industry between a state-pair, the higher is the impact of banking integration on the growth of that sector in the less specialized state. Our results indicate that a banking channel shapes the states’ industrial landscape. Banks prior exposure to different sectors appears to have important consequences for regional economic integration.

Keywords: banking integration; industry structure; industrial specialization; economic convergence

JEL Classification: G21, G28, O43, O47, R12

Suggested Citation

Dincbas, Neslihan and Michalski, Tomasz Kamil and Ors, Evren, Banking Integration and Growth: Role of Banks' Previous Industry Exposure (July 4, 2017). HEC Paris Research Paper No. FIN- 2015-1096. Available at SSRN: https://ssrn.com/abstract=2630969 or http://dx.doi.org/10.2139/ssrn.2630969

Neslihan Dincbas

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Tomasz K. Michalski

HEC Paris - Economics & Decision Sciences ( email )

Paris
France

Evren Ors (Contact Author)

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France
+33 1 3967 7123 (Phone)
+33 1 3967 7085 (Fax)

HOME PAGE: http://www.hec.fr/ors

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