The Role of Development and Commercial Banking in Promoting Economic Growth in Mexico: A Sectoral Analysis

Abstract

This study examines the impact of credit extended by both commercial and development banks on exports, GDP, and FDI across different sectors in Mexico. The research lies within the broader context of financial sector development and its role in promoting regional development and economic growth. We use panel data techniques to compare traditional models that include only commercial bank credit with models incorporating development bank credit. Our results emphasize the different and complementary roles of commercial and development banks. The latter is crucial in addressing market failures and supporting long-term, socially and economically beneficial projects. The study concludes that development bank credit should be integrated into economic studies to better understand its contribution to sustainable growth. It suggests that policymakers should coordinate the roles of both banking sectors to foster a balanced and resilient economy.