 Local financial development, socio-institutional environment, and firm productivity: Evidence from ItalyPost-Print from HAL Abstract: This paper uses the case of Italy to investigate the effects of local financial and socio-institutional development on productivity. The analysis employs firm-level productivity data and exploits variations in banking sector development, judicial enforcement, and social capital across Italian provinces. After controlling for potential endogeneity, our empirical results suggest that the real effects of financial development are conditional on the quality of the socio-institutional environment. In particular, we find that the positive effects of greater financial depth on productivity are stronger when the socio-institutional environment is sufficiently developed. Therefore, to exploit potential productivity gains stimulated by financial development, it is necessary to achieve a higher-quality socio-institutional environment, including reducing the duration of civil trials. Keywords: Finance-growth nexus; Social capital; Judicial enforcement; Firm productivity (search for similar items in EconPapers) Published in European Journal of Political Economy, 2014, 35, pp.38-51. ⟨10.1016/j.ejpoleco.2014.03.006⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01441936 DOI: 10.1016/j.ejpoleco.2014.03.006 Access Statistics for this paper More papers in Post-Print from HAL |
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