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Bank Size or Distance: What Hampers Innovation Adoption by SMEs?

Pietro Alessandrini (), Andrea Presbitero and Alberto Zazzaro ()

No 2, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: A growing body of research is focusing on banking organizational issues, emphasizing the difficulties encountered by hierarchically organized banks in lending to informationally opaque borrowers. While the two extreme cases of hierarchical and non{hierarchical organizations are typically contrasted, what shapes the degree of hierarchy and how to measure it remain fairly vague. In this paper we compare bank size and distance between a bank's branches and headquarter as possible sources of organizational frictions, by studying their impact on small rms' likelihood of introducing innovations. Results show that SMEs located in provinces where the local banking system is functionally distant are less inclined to introduce innovations, while the market share of large banks is only slightly correlated with rms' propensity to innovate.

Keywords: Bank size; Functional distance; Innovation; SMEs (search for similar items in EconPapers)
JEL-codes: G21 G34 O31 R51 (search for similar items in EconPapers)
Pages: 35
Date: 2008-09
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-ino
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http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir002.pdf First version, 2008 (application/pdf)

Related works:
Journal Article: Bank size or distance: what hampers innovation adoption by SMEs? (2010) Downloads
Working Paper: Bank Size or Distance: What Hampers Innovation Adoption by SMEs ? (2007) Downloads
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