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Does institutional quality matter for lending relationships?

Author

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  • Annamaria Nifo
  • Sabrina Ruberto
  • Gaetano Vecchione

Abstract

Why the number of banking relationships per firm varies so much across space? Is it due to microeconomic features of firms localized in different places or is there something systematic, connected to geographical macroeconomic factors? Does local institutional endowment matter in the firm’s choice? We address these issues 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. Consistent with previous studies, we find that provincial institutions are a basic determinant of the observed differentials in the number of banking relationships per firm.JEL classification numbers: G20; G21; L60; O43; R11.Keywords: Firm-Bank relationships, Institutional quality, Italian manufacturing SMEs.

Suggested Citation

  • Annamaria Nifo & Sabrina Ruberto & Gaetano Vecchione, 2018. "Does institutional quality matter for lending relationships?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 8(2), pages 1-4.
    • Handle: RePEc:spt:apfiba:v:8:y:2018:i:2:f:8_2_4
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    More about this item

    Keywords

    firm-bank relationships; institutional quality; italian manufacturing smes.;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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