Do Rural Banks Matter That Much? Burgess and Pande (2005) Reconsidered
| Author(s): | PhDr. Jaromír Baxa Ph.D., Nino Buliskeria , |
|---|---|
| Type: | Submissions |
| Year: | 2020 |
| Number: | 0 |
| ISSN / ISBN: | 1099-1255 |
| Published in: | Journal of Applied Econometrics |
| Publishing place: | |
| Keywords: | Rural Poverty, Bank Expansion, Finance and Development, Access to Finance |
| JEL codes: | |
| Suggested Citation: | |
| Grants: | GACR no. 20-14990S: Economic policy in times of uncertainty (submitted in March 2019) GAUK 1034519: Financial development and income inequality Charles University Research Centre program No. UNCE/HUM/035. |
| Abstract: | We replicate Burgess and Pande’s (American Economic Review, 2005, 95 (3), 780–795) work where they analyze the effects of India’s state-led bank expansion on poverty from 1961 to 1990. Using the structural shift in 1977 as an instrument, they find that the expansion in rural areas decreased poverty. However, Burgess and Pande do not consider other concurrent policies affecting the financial sector and poverty, undermining the instrument’s validity. We show that structural shifts in the rural bank expansion and poverty can be identified for almost any other year. Therefore, our results imply that their experiment does not prove a superior impact of bank expansion on poverty reduction. |
| Downloadable: |
BuliskeriaBaxa_JAEsubmission |
