Abstract
AbstractThis article provides evidence that smaller, regional public financial intermediaries contributed to Germany's industrial development, using a new dataset of the foundation year and location of Prussian savings banks. This extends the bank–growth nexus beyond its traditional focus on large universal banks. Since savings banks were public financial intermediaries, our results further suggest that state intervention can be successful in the financial sector, particularly at the early stages of industrial development when capital requirements are manageable, and access to international capital markets is limited.
Highlights
Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden
Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte
When examining the Prussian census data, we found 39 towns entering the census during the period 1849–85 and gaining legal city rights
Summary
They emerged in the late eighteenth century in various parts of Germany and were formed by either individuals or family groups or else by small partnerships.[45] While savings banks experienced an extraordinary expansion during our observation period, private banks continuously lost ground Their market share fell from 35.5 to about 4 per cent from 1860 to 1913.46 We cannot control quantitatively for the impact of private banks: any estimates of the number and size in different German regions would be imprecise because private banks were rarely incorporated.[47] as Fohlin points out, the availability of secure government business—with some exceptions—made the conservative banking elite reluctant to finance riskier business.[48] private banks usually originated as adjuncts to trading houses and were mostly present in important trading cities such as Cologne and Frankfurt.[49] Since we are interested in the impact of the foundation of savings banks in small, remote cities, the probability that we have mistakenly estimated the impact of private banks and not savings banks is low.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
