The effect of the bank regulatory environment on state economic activity

Change‐point Analysis of the Growth Effects of State Banking Deregulation

“…As mentioned, Jayaratne and Strahan (1996), Strahan (2003), and Krol and Svorny (1996) have found quite large growth effects associated with branch deregulation, on the order of a 0.5% to 1% permanent increase in state real per capita income growth. As mentioned, Jayaratne and Strahan (1996), Strahan (2003), and Krol and Svorny (1996) have found quite large growth effects associated with branch deregulation, on the order of a 0.5% to 1% permanent increase in state real per capita income growth.…”

“…For branching deregulation as a specific reform, papers by Jayaratne and Strahan (1996), Krol and Svorny (1996), and Strahan (2003), using fixed effects regressions of state panels of economic growth, find positive intercept shifts for states subsequent to years of deregulation. The effects of branch deregulation are found to be quite considerable, to the order of a permanent 0.5% increase in annual real state growth, or about $40 billion in additional income per year at current rates for the 37 states that have deregulated since 1970.…”

Regional disparities in the spatial correlation of state income growth, 1977–2002

“…Recent evidence suggests that the relaxation of state laws restricting interstate banking and intrastate bank branching during the 1970s and 1980s may have had a large impact on the growth rate of state income (Krol and Svorny 1996, Jayaratne and Strahan 1996, Strahan 2003. Jayaratne and Strahan (1996) argue that deregulation substantially improved bank performance by reducing operating costs and loan losses, and estimate that deregulation permanently increased a state's real income growth rate by some 0.50-1.00 percentage points.…”

Product Market Regulation and Labor Market Performance around the World

“…6 6 See, for example, Butkiewicz and Latham (1991), Krol and Svorny (1996), Feldmann (2006a, 2012a), Levchenko et al . (2009).…”