The Spatial Structure of Financial Development in Brazil

Abstract

Using a GMM estimator for a spatial panel model with an endogenous spatial lag and spatial moving average errors we investigate the spatial structure of the financial system in Brazil. The results point to a negative spatial association between the Brazilian municipalities' financial system, in the way that a municipality with a more developed financial system tends to be surrounded by municipalities with less developed financial systems. La structure spatiale du d�veloppement financier au Br�sil R�sum� En utilisant un estimateur GMM pour un mod�le � panneau spatial, avec un d�calage spatial endog�ne et des erreurs � moyenne mobile spatiale, nous examinons la structure spatiale du syst�me financier au Br�sil. Les r�sultats semblent indiquer l'existence d'une association spatiale n�gative entre les municipalit�s br�siliennes sur le plan de leur syst�me financier, dans le cadre de laquelle une municipalit� dot�e d'un syst�me financier plus �volu� a tendance � �tre entour�e de municipalit�s poss�dant des syst�mes financiers moins �volu�s. La estructura espacial del desarrollo financiero en Brasil Extracto Utilizando un estimador GMM (M�todo General de Momentos) para un modelo de panel espacial con un lapso espacial end�geno y errores de promedios m�viles espaciales, investigamos la estructura espacial del sistema financiero en Brasil. Los resultados apuntan hacia una asociaci�n espacial negativa entre el sistema financiero de las municipalidades brasile�as, de forma que una municipalidad con un sistema financiero m�s desarrollado tiende a estar rodeada de municipalidades con sistemas financieros menos desarrollados.Financial development, spatial structure, bank strategy, Brazil, O16, R12, G21,

Identifying Determinants of Branch Performances in Agricultural Bank of China: A Spatial Econometric Approach

“…The total number of employees in three sectors (primary, secondary and tertiary) was employed in evaluating bank branches’ performances by Doyle et al (), Boufounou () and Crocco et al. (). However, the data of the number of employers in the three sectors (primary, secondary and tertiary) and the decomposition of these three sectors at the provincial and municipality level in Mainland China were released incompletely and patchily.…”

“…The studies (Graddy and Kyle, ; Avery et al., ; Bos and Kool, ; Crocco et al., ) pointed to urbanisation as an important factor in allocating the branch network of banks. Branches in urban areas outperform those in rural areas.…”

Editorial

“…Nevertheless, as a succinct descriptive device, it remains a relevant model of the economic landscape which still has something to tell us about the geography of finance, as Martin (1999) shows. Crocco et al (2010) give a detailed and revealing account of the causes and consequences of these spatial patterns, arguing that 'liquidity preference and fundamental uncertainty have discouraged the proliferation of central places and led the concentration of financial system's activities', which has evidently magnified the costs of accessing financial services in some areas relative to more central locations. Their paper opens up new lines of research on the spatial structure of financial development, and invites further exploration of the developmental consequences for remoter areas.…”

“…These variables are shown to have a variegated distribution across municipalities. Crocco et al (2010) argue that less developed areas are characterized by relatively high levels of liquidity preference, so that consumers and businesses do not borrow and this restricts economic development. Interestingly, as a result of fitting a spatial panel model with moving average spillovers, both tax payments and credit supply display significant negative spatial association, suggestive of competition effects operating at this level of spatial resolution so that 'If one municipality has a high level of financial operations, its neighbourhood tends to have a lower level'.…”

Financialization and Space: Theoretical and Empirical Contributions | Financeirização e Espaço: Contribuições Teóricas e Empíricas

“…Space rules the diversity of characteristics that affect the spread of financial relations: different degrees of available information may impede the establishment of specific complex financial activities (FURLONG and KREINER, 2007;CROCCO, 2012); various economic conditions change the liquidity and prospects for the region (CROCCO et al, 2010b;CAVALCANTE, 2012), which may also affect the dynamics of financialization; more importantly, the social and cultural regional identities also permeate the credit and debit relations, thereby affecting the pace of financialization throughout the territory. By following such a framework, while considering the spatial properties of financialization processes, it may be assumed that the financial motives, actors and services behave in different manners throughout the territory.…”