Preliminary and incomplete THE REAL EFFECTS OF LOCAL FINANCIAL DEVELOPMENT
نویسندگان
چکیده
We construct a new indicator of financial development by estimating a regional effect on the probability that, ceteris paribus, a household is shut off from the credit market. By using this indicator we explore the real effects of regional differences in financial development. We find that financial development enhances the probability an individual starts his own business, favors entry, increases competition, and promotes growth of firms. As predicted by theory, these effects are weaker for larger firms, which can more easily raise funds outside of the local area. Overall, the results suggest local financial development is an important determinant of the economic success of an area.
منابع مشابه
Very preliminary Not for circulation THE REAL EFFECTS OF LOCAL FINANCIAL DEVELOPMENT
We construct a new indicator of financial development by estimating a regional effect on the probability that, ceteris paribus, a household is shut off from the credit market. By using this indicator we show that the level of local financial development enhances the probability an individual starts his own business, increases the creation of new firms and the level of competition, eases liquidi...
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