Local banking development and income distribution across Italian provinces

Alexandra D'Onofrio and Pierluigi Murro

No 1307, Working Papers CASMEF from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: What are the effects of local credit institutions on the distribution of income? Why should local banking development matter for the level of inequality? We focus on how different dimensions of banking development and other characteristics of 103 provinces in Italy affect the level of inequality. Using panel estimation and data over the period 2006-2010, we find that local banking development has a significant negative effect on the Gini coefficient and other measures of inequality, i.e. higher banking development is associated with lower inequality. When considering Italian macro-areas sub-samples (North, Center, South), the result is significant only for the North; thus suggesting the existence of a nonlinear relationship between financial development and income inequality, depending on the level of development.

Keywords: Income distribution; Inequality; Financial development; Italy. (search for similar items in EconPapers)
JEL-codes: G21 G38 O15 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Banking development, economic structure and income inequality (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:lui:casmef:1307

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