Credit, Venture Capital and Regional Economic Growth

In this paper we investigate the role of credit and venture capital investments on regional economic growth. The dataset consists of a panel of 53 regions belonging to three countries, Germany, Italy and Spain, for the period 1995‐2008. To avoid a problem of endogeneity, we estimate a dynamic panel using the generalised method of moments (GMM). The results underline the important role played by different types of financial intermediaries in regional economic growth: both mutual and commercial banks areimportant for regional growth but the role of mutual banks is greater in economically deprived areas [EDAs]. Similar results are obtained for the venture capital investments.