How important are banks for development? National banks in the united states, 1870-1900

• Autores: Scott L. Fulford
• Localización: The Review of economics and statistics, ISSN 0034-6535, Vol. 97, Nº 5, 2015, págs. 921-938
• Idioma: inglés
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• Resumen

  • Do banks matter for growth, and if so, how? This paper examines the effects of national banks in the United States from 1870 to 1900. I use the discontinuity in entry caused by a large minimum size requirement to identify the effects of banking. For the counties on the margin between getting a bank and not, gaining a bank increased production per person by 10%. National banks in rural areas improved agriculture over manufacturing, moving counties toward geographic comparative advantage. Since these banks made few long-term loans, the evidence suggests that the provision of working capital and liquidity matters for growth.