Does institutional quality matter for lending relationships? Evidence from Italy
Sabrina Ruberto and
Gaetano Vecchione ()
MPRA Paper from University Library of Munich, Germany
Why the number of banking relationships per firm varies so much across space? Is it simply due to microeconomic features of firms localized in different regions or is there instead something connected to microeconomics and macroeconomic factors? Can the institutional endowment of a region affect the number of bank-firm relationships? We seek to answer these questions with reference to the Italian case, one particularly interesting because of the substantial institutional gap between Center-North and South and the high average number of banking relationships per firm. We investigate the role of institutional quality in determining firms’ choices and, consistent with previous studies, find that institutions are a basic determinant of the observed differentials in the number of firms’ banking relationships among different Italian provinces.
Keywords: Firm-Bank relationship; Institutional quality; Italian manufacturing; SMEs. (search for similar items in EconPapers)
JEL-codes: G20 G21 L60 O43 R11 (search for similar items in EconPapers)
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