Bad loans and de novo banks: evidence from Italy

Rachele Anna Ambrosio () and Paolo Coccorese
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Rachele Anna Ambrosio: Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno

No 3_233, Working Papers from Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno

Abstract: The existing empirical evidence suggests that there is a “winner’s curse” for banks entering new markets. Actually, it has been assessed that de novo banks generally experience higher bad loans rates than mature banks for about ten years. We investigate whether this persistence has characterized the Italian banking industry in the period 1995-2010, and find that theory predictions are confirmed by empirical results. This evidence is robust to different model specifications. We also show that cooperative credit banks (CCBs) perform better than the others banks, due to their focus on local markets.

Keywords: Banking; Competition; Market structure; Conduct (search for similar items in EconPapers)
JEL-codes: G21 L10 L13 (search for similar items in EconPapers)
Date: 2014-10
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Published in Working Papers, November 2014, pages 1-19

Downloads: (external link)
http://www.dises.unisa.it/RePEc/sep/wpaper/3_233.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: Bad Loans and De Novo Banks: Evidence From Italy (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:sep:wpaper:3_233

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