Recent empirical studies have shown that the structure of the legal system and the efficiency in law enforcement influence the financial structure of the firms, their ability to gain access to capital markets, and the growth rate of economic systems. This paper uses a simple banking model with...

This paper offers a methodological contribution to empirical analysis of the relationships between banking and economic growth by proposing the microeconomic efficiency of banks as a new proxy for the state of development of the banking system. This measure is partly able to overcome the problem...