Assessing the impact of banking intermediationon the economy of Russian regions: The post-crisis trends

Abstract

The paper explores the changes in relative levels of banking services availability in Russia’s regions in 2007-2015 and the relationship between the regional financial development characteristics and the indicators of GRP and investments on the regional level in 2002-2014. For 2013-2015, the paper demonstrates the divergence of regions by the composite indicator - the composite banking services density index by region and its separate components. A significant positive relationship of indicators characterizing the regions’ financial mediator services density with the indicators of GRP has been revealed. This relationship is non-linear which is demonstrated in different sensitivity of GRP per capita by groups of regions to the indicators of financial mediation, so that regions with relatively lower or, on the contrary, higher GRP per capita show weaker or no relationship between finance and growth, whereas regions of “central” groups with medium values of GRP demonstrate stronger connection.