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Cooperative banks and income inequality: Evidence from Italian provinces

Pierluigi Murro () and Valentina Peruzzi ()

No 1804, Working Papers CASMEF from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: The aim of this paper is to investigate whether different credit institutions, and in particular cooperative banks, have a different impact on the reduction of income inequalities. By analyzing Italian local credit markets, i.e. Italian provinces, over the period 2001-2011, we find that cooperative banks’ diffusion significantly reduces income inequality. This finding is robust to different measures of income inequality, different proxies of local banking structure (cooperative banks branches, popular banks branches, commercial banks branches), and different estimation techniques. When we study the channel of influence, we find that the diffusion of cooperative banks is particularly relevant for income distribution where loans to families and firms are larger, bank-firm relationships are tighter and the number of new firms over incumbent is larger.

Keywords: Cooperative banks; income inequality; financial development. (search for similar items in EconPapers)
JEL-codes: G21 G38 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-eur
Date: 2018-11
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