{"title":"The role of banking development in economic growth: Quantity versus quality","authors":"Guangdong Xu","doi":"10.1111/ecaf.12699","DOIUrl":null,"url":null,"abstract":"<p>This article surveys the literature on the relationship between banking development and economic growth, with particular attention given to the role of the efficiency (quality) dimension of banking development. Overlooking banking efficiency in explaining economic growth may lead to serious omitted variable bias. However, incorporating banking efficiency into growth models has proved to be a challenging task. There is no agreement in the literature on how to define, measure, and evaluate banking efficiency. In addition, most studies focus on transformation efficiency inside banks and overlook efficiency in the process of credit allocation.</p>","PeriodicalId":44825,"journal":{"name":"ECONOMIC AFFAIRS","volume":"45 2","pages":"261-276"},"PeriodicalIF":1.8000,"publicationDate":"2025-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ECONOMIC AFFAIRS","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/ecaf.12699","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This article surveys the literature on the relationship between banking development and economic growth, with particular attention given to the role of the efficiency (quality) dimension of banking development. Overlooking banking efficiency in explaining economic growth may lead to serious omitted variable bias. However, incorporating banking efficiency into growth models has proved to be a challenging task. There is no agreement in the literature on how to define, measure, and evaluate banking efficiency. In addition, most studies focus on transformation efficiency inside banks and overlook efficiency in the process of credit allocation.
期刊介绍:
Economic Affairs is a journal for those interested in the application of economic principles to practical affairs. It aims to stimulate debate on economic and social problems by asking its authors, while analysing complex issues, to make their analysis and conclusions accessible to a wide audience. Each issue has a theme on which the main articles focus, providing a succinct and up-to-date review of a particular field of applied economics. Themes in 2008 included: New Perspectives on the Economics and Politics of Ageing, Housing for the Poor: the Role of Government, The Economic Analysis of Institutions, and Healthcare: State Failure. Academics are also invited to submit additional articles on subjects related to the coverage of the journal. There is section of double blind refereed articles and a section for shorter pieces that are reviewed by our Editorial Board (Economic Viewpoints). Please contact the editor for full submission details for both sections.