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birdwatcherDailyMail -- Speaking to MailOnline, Professor Pascali said: 'I argue that cities, in which the local Jewish community in 1500 caused an early development of the banking sector, have more banks today and, because of this, are more developed today.
Local banking development has a large causal impact on economic development.
'In particular, using firm-level data, I show that a higher density of local banks increases aggregate productivity in the manufacturing sector, by reallocating resources towards the most productive firms.
'This is the main channel through which local banks have an effect on economic development.'
Local banking development has a large causal impact on economic development.
'In particular, using firm-level data, I show that a higher density of local banks increases aggregate productivity in the manufacturing sector, by reallocating resources towards the most productive firms.
'This is the main channel through which local banks have an effect on economic development.'