Public Certification to Fight against Illegality: Evidence on Private Investment
Antonio Acconcia,
Maria Rosaria Alfano (mariarosaria.alfano@unicampania.it),
Anna Laura Baraldi (laura.baraldi@unicampania.it) and
Claudia Cantabene
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Maria Rosaria Alfano: Università della Campania L. Vanvitelli
Anna Laura Baraldi: Università della Campania L. Vanvitelli
CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy
Abstract:
In 2012, the Italian government introduced public certification to signal creditworthy firms not involved in corruption and accounting frauds, and with no connections to mafias. In the case of loan applications, this certification can determine lower credit costs due to the lower firm screening costs incurred by the banks. We provide evidence consistent with its effectiveness in mitigating financial frictions. Our results show that certified firms increase their tangible capital expenditure, and show also that the effect of the certification is stronger in areas where it is more difficult for the banks to assess firms' creditworthiness. This latter finding has implications for local development.
Keywords: Corruption and Organized Crime; Creditworthiness; Investment; Public Certification. (search for similar items in EconPapers)
JEL-codes: G14 G21 H40 H81 R38 (search for similar items in EconPapers)
Date: 2021-12-21
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:633
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