Poorly developed financial markets are widely believed to block economic growth, because only modern financial intermediaries such as banks can mobilize large amounts of financial capital at low cost. This claim is supported by cross country regressions, but the regressions assume that credit intermediation is measured accurately before modern financial intermediaries arrive. If traditional intermediaries were mobilizing large amounts of financial capital before banks or other modern intermediaries appear, then the strength of the relationship between financial development and economic growth would be cast into doubt. Using an original panel dataset from nineteenth-century France, we provide the first estimates of how much financial capital key traditional intermediaries (notaries) were mobilizing for an entire economy during its first century of economic growth, and we analyze the lending that the notaries made possible in French mortgage market. The amount of capital they mobilized turns out to be large. We then analyze the effect that financial deepening had on the notaries as banks spread and find that the banks' and notaries' services were in all likelihood complements. The implication is that the link between financial development and economic growth may therefore be weaker than is assumed.
Poorly developed financial markets are widely believed to block economic growth, because only modern financial intermediaries such as banks can mobilize large amounts of financial capital at low cost. This claim is supported by cross country regressions, but the regressions assume that credit intermediation is measured accurately before modern financial intermediaries arrive. If traditional intermediaries were mobilizing large amounts of financial capital before banks or other modern intermediaries appear, then the strength of the relationship between financial development and economic growth would be cast into doubt. Using an original panel dataset from nineteenth-century France, we provide the first estimates of how much financial capital key traditional intermediaries (notaries) were mobilizing for an entire economy during its first century of economic growth, and we analyze the lending that the notaries made possible in French mortgage market. The amount of capital they mobilized turns out to be large. We then analyze the effect that financial deepening had on the notaries as banks spread and find that the banks' and notaries' services were in all likelihood complements. The implication is that the link between financial development and economic growth may therefore be weaker than is assumed.
Titre
en
Entry, information, and financial development: A century of competition between French banks and notaries
Auteur(s)
Philip T. Hoffman1
, Gilles Postel-Vinay2, 3
, Jean-Laurent Rosenthal4
1
CS CALTECH -
Computer Science Department
( 74355 )
- Computer Science Department California Institute of Technology 1200 E. California Boulevard MC 256-80 Pasadena, CA 91125 USA
- États-Unis
California Institute of Technology ( 340667 )
2
PSE -
Paris-Jourdan Sciences Economiques
( 139754 )
- 48 boulevard Jourdan 75014 Paris
- France
École normale supérieure - Paris ( 59704 )
;
Université Paris Sciences et Lettres ( 564132 )
;
Institut National de la Recherche Agronomique USC1336 ( 92114 )
;
École des hautes études en sciences sociales ( 99539 )
;
École des Ponts ParisTech ( 301545 )
;
Centre National de la Recherche Scientifique UMR8545 ( 441569 )
3
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
Université Paris 1 Panthéon-Sorbonne ( 7550 )
;
École normale supérieure - Paris ( 59704 )
;
Université Paris Sciences et Lettres ( 564132 )
;
École des hautes études en sciences sociales ( 99539 )
;
École des Ponts ParisTech ( 301545 )
;
Centre National de la Recherche Scientifique ( 441569 )
;
Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement ( 577435 )
4
HSS CALTECH -
Division of the Humanities and Social Sciences
( 260577 )
- États-Unis
California Institute of Technology ( 340667 )
Page/Identifiant
39-57
Volume
55
Comité de lecture
Oui
Audience
Internationale
Date de publication
2015-01
Nom de la revue
Explorations in Economic History
(ISSN : 0014-4983, ISSN électronique : 1090-2457)
Publié par Elsevier
Revue non référencée dans Sherpa-Romeo
G - Financial Economics/G.G2 - Financial Institutions and Services/G.G2.G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages
O - Economic Development, Innovation, Technological Change, and Growth/O.O1 - Economic Development/O.O1.O16 - Financial Markets • Saving and Capital Investment • Corporate Finance and Governance
O - Economic Development, Innovation, Technological Change, and Growth/O.O1 - Economic Development/O.O1.O17 - Formal and Informal Sectors • Shadow Economy • Institutional Arrangements
N - Economic History/N.N2 - Financial Markets and Institutions/N.N2.N23 - Europe: Pre-1913
Domaine(s)
Sciences de l'Homme et Société/Economies et finances
Financement
Ce travail a bénéficié d'une aide de l'Etat gérée par l'Agence Nationale de la Recherche au titre du programme « Investissements d'avenir » portant la référence ANR-10-LABX-93-01.
This work was supported by the French National Research Agency, through the program Investissements d'Avenir, ANR-10--LABX_93-01
Voir aussi
https://archives-publications.inrae.fr/320064.pdf
Mots-clés
en
Financial development, France, Financial markets, Banks, Intermediaries
Philip T. Hoffman, Gilles Postel-Vinay, Jean-Laurent Rosenthal. Entry, information, and financial development: A century of competition between French banks and notaries. Explorations in Economic History, 2015, 55, pp.39-57. ⟨10.1016/j.eeh.2014.04.002⟩. ⟨halshs-01207248⟩