Geography and Access to Credit: The Case of the Italian Mezzogiorno

Carlo Bottoni (), Michele Cascarano, Iconio Garrì (), Litterio Mirenda, Paolo Emilio Mistrulli (), Dalia Maria Pizzillo (), Davide Revelli () and Tiziano Ropele ()
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Carlo Bottoni: Bank of Italy
Iconio Garrì: Bank of Italy
Paolo Emilio Mistrulli: Bank of Italy
Dalia Maria Pizzillo: Bank of Italy
Davide Revelli: Bank of Italy
Tiziano Ropele: Bank of Italy

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, 2024, vol. 10, issue 3, No 4, 1029-1085

Abstract: Abstract We analyze the geographical differences in the Italian firms’ access conditions to credit in the period 2010–19. In line with earlier studies, our econometric results confirm that firms headquartered in the South of Italy face worse borrowing conditions compared to similar firms in the Centre-North. Southern firms pay higher interest rates on loans and are more frequently asked to pledge their assets as collateral. Credit lines granted to them are also more fragile as banks are more prone to call them back. Those less favorable credit access conditions end up reducing credit demand. Finally, we document, in line with previous studies, that the gap in credit conditions is partly due to external diseconomies that are more severe in the South of Italy.

Keywords: Territorial gaps; Credit access; Credit conditions; External diseconomies (search for similar items in EconPapers)
JEL-codes: G21 R11 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40797-024-00284-4

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