This paper explores the relationship between the spread of bank offices, banking sector concentration, and economic growth in English and Welsh counties in the four decades before WW1. During this period, banks rapidly expanded their branch networks, while banking sector concentration increased. Findings from both panel fixed effects and instrumental variable regressions suggest that an increase in the number of bank offices in English and Welsh counties had a positive impact on local economic growth. There is no evidence of banking sector concentration being negatively associated with local economic performance prior to WW1.

This article shows that neither stock markets nor commercial banks had a significant impact on the UK's economic growth from 1850 to 1913. These results are based on a new dataset on paid-in capital of securities listed on the UK's stock exchanges, which is analysed using a vector autoregression with time-varying parameters. Econometric results also indicate that the growth of the banking sector and the capital markets was, to a significant extent, driven by factors other than domestic economic growth.

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