Does the Number of Bank Branches and ATMs Boost Economic Activity in Latin America?

Abstract

This research is aimed at analyzing the impact of the number of bank branches and the number of ATMs on economic growth in Argentina, Brazil, Chile, Costa Rica, Ecuador, Mexico, Peru and Uruguay, during 2004-2018. Methodology: panel data models are estimated: fixed effects and random effects. Results: The main finding is that economic growth is positively affected by the number of bank branches and ATMs. Recommendations: Decision makers are encouraged to seek the appropriate instruments and incentives to increase the number of bank branches and ATMs per 100,000 adults, and thus contribute to economic growth. Limitations: The research is restricted to analyzing only the role of the number of bank branches and ATMs in economic growth. Originality: It is concentrated in seven Latin American economies, there is greater data availability, panel data analysis is carried out, which allows the use of more countries, variables and periods. Conclusions: The number of bank branches and ATMs drive economic activity in Latin America.