Citation

Discussion Paper Details

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Title: Savings Banks and the Industrial Revolution in Prussia Supporting Regional Development with Public Financial Institutions

Author(s): Sibylle Lehmann-Hasemeyer and Fabian Wahl

Publication Date: December 2017

Keyword(s): Industrialisation, Prussia, Public Infrastructure, Regional and Urban Development and Savings Banks

Programme Area(s): Development Economics and Economic History

Abstract: We show that smaller, regional public financial intermediaries significantly contributed to industrial development, using a new data set of the foundation year and location of Prussian savings banks. This extends the banking-growth nexus beyond its traditional focus on the large universal banks, to savings banks. The saving banks had an impact through the financing of public infrastructure, such as railways, and new private factories. Saving banks were public financial intermediaries, so our results suggest that state intervention can be successful, particularly at early stages of industrial development when capital requirements are manageable, and access to international capital markets is limited.

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Bibliographic Reference

Lehmann-Hasemeyer, S and Wahl, F. 2017. 'Savings Banks and the Industrial Revolution in Prussia Supporting Regional Development with Public Financial Institutions'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12500