Full Citation

Title: How Important Are Banks for Development? National Banks in the United States, 1870-1900

Citation Type: Journal Article

Publication Year: 2015

ISBN:

ISSN:

DOI: https://doi.org/10.1162/REST_a_00546

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Abstract: 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.

Url: https://www.mitpressjournals.org/doi/10.1162/REST_a_00546

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Authors: Fulford, Scott, L

Periodical (Full): Review of Economics and Statistics

Issue: 5

Volume: 97

Pages: 921-938

Data Collections: IPUMS Health Surveys - NHIS

Topics: Labor Force and Occupational Structure, Land Use/Urban Organization, Other

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