The role of current banking system in the growth of industrial sector in Isfahan province (Iran)

Abstract

Studying the function of banks is crucial because their vigorous role in the economy seems to be a subject of immense importance. In the present study, we analyze and study the role of whole banks, commercial banks and specialized banks between 2002 and 2012 in Isfahan, based on the growth of value added approach in the industrial sector. In order to investigate this matter, we have estimated three extinction panels for the whole banking system, specialized banks and commercial banks in Eviews 9. Based on the results it can be argued that in the panels of whole banks and specialized banks, payment facilities have a positive and meaningful impact on the growth of value added in all three sectors of the economy, but in the panel of commercial banks, only banking facilities on a 10 percent level have a positive and meaningful impact on the growth of value added in the industrial sector. As a result, we can conclude that specializing the bank's activities can have a positive effect on the growth of value added in various sectors of the economy.