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    Finance and urbanization in early nineteenth-century New York


    Bodenhorn, Howard and Cuberes, David (2018) Finance and urbanization in early nineteenth-century New York. Journal of Urban Economics, 104. pp. 47-58. ISSN 0094-1190

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    Abstract

    Using information on the location of commercial banks in early nineteenth-century New York State we show that the opening of a bank had a significant positive effect on town population growth after the bank opened. Our results are robust to different samples of cities, control groups, time spans, as well as omitting New York City or small towns. To identify this relationship we exploit the legislative granting of corporate bank charters and argue that lobbying introduced enough exogenous variation in bank location choices that the location of banks in this period was different from what it would have been under a system of free entry based on entrepreneurial expectations of a towns’ future population. Using a generalized difference-in-difference approach, we show that towns that petition for and received a bank between 1821 and 1835 saw their population increase more rapidly than those that petitioned for and did not receive a bank. Because urbanization and modernization were correlated in the nineteenth century, these results are broadly consistent with the finance-growth nexus identified elsewhere in the economics and economic history literatures.
    Item Type: Article
    Keywords: Population growth; Financial development; Urbanization; Banking; Corruption;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 19606
    Identification Number: 10.1016/j.jue.2018.01.001
    Depositing User: David Cuberes
    Date Deposited: 25 Mar 2025 16:12
    Journal or Publication Title: Journal of Urban Economics
    Publisher: Elsevier
    Refereed: Yes
    Related URLs:
    URI: https://mural.maynoothuniversity.ie/id/eprint/19606
    Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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