removing barriers to bank entry on bank competition and economic growth. As governments were not concerned about systemic … stability in this period, we are able to isolate the effects of bank competition from those of state implicit guarantees. We … find that the introduction of free banking laws stimulated the creation of new banks and led to more bank failures. Our …

-in-differences design, and a sample of 596 banks (17,783 bank-year proposals), we are the first to provide large-sample, systematic evidence … further document that the relation between the two is more pronounced among states with higher degrees of deregulation and … weaker levels of pre-deregulation competition. Overall, our findings are consistent with the notion that increased …