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A Contribution on Relationship Banking. Economic, Anthropological and Mathematical Reasoning, Empirical Evidence from Italy

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  • Desogus, Marco
  • Casu, Elisa

Abstract

This research concerns the tightness of the economy and demonstrates the need for procedural reforms between banks and companies for more relational and infra-cooperative structures. Among these corrections, we suggest that banks and companies be considered as unicum bank-enterprises and monetary-financial and productive activity as two faces of the same coin, rather than distinct functions of separate entities. With the rapid and increasingly “liquid” evolution—to put it in the Bauman (2000) context—of financial intermediation in large groups and fintech, it is with a certain audacity that we propose more “solid” action. Following an anthropological and economic-behavioral survey on the inherent human qualities of cooperation and relationality, we situate these two qualities in economic actions and particularly in the relationship between financing institutions and producers. This heterodox notion is supported by an analysis of Italian performance data on financing trends, bank non-performing loans and the number of companies in the production sector, which reflects the progressive deterioration of the economy. From there, we apply a mathematical model to finalize our hypothetical reform. We finally recommend a strategy for the gradual implementation of our conclusions, based on an examination of existing cooperative banking intermediation practices.

Suggested Citation

  • Desogus, Marco & Casu, Elisa, 2020. "A Contribution on Relationship Banking. Economic, Anthropological and Mathematical Reasoning, Empirical Evidence from Italy," MPRA Paper 114365, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114365
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    References listed on IDEAS

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    1. Bernanke, Ben & Gertler, Mark & Gilchrist, Simon, 1996. "The Financial Accelerator and the Flight to Quality," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 1-15, February.
    2. Zamagni, Stefano, 2011. "Cooperazione di credito e sviluppo civile: come esaltare il potenziale identitario delle BCC," AICCON Working Papers 81-2011, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    3. Carole Uhlaner, 1989. "“Relational goods” and participation: Incorporating sociability into a theory of rational action," Public Choice, Springer, vol. 62(3), pages 253-285, September.
    4. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    5. Mitchell A. Petersen & Raghuram G. Rajan, 1995. "The Effect of Credit Market Competition on Lending Relationships," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 407-443.
    6. Ferri, Giovanni & Messori, Marcello, 2000. "Bank-firm relationships and allocative efficiency in Northeastern and Central Italy and in the South," Journal of Banking & Finance, Elsevier, vol. 24(6), pages 1067-1095, June.
    7. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
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    Cited by:

    1. Marco Desogus & Beatrice Venturi, 2023. "Stability and Bifurcations in Banks and Small Enterprises—A Three-Dimensional Continuous-Time Dynamical System," JRFM, MDPI, vol. 16(3), pages 1-20, March.
    2. Desogus, Marco & Casu, Elisa, 2020. "What Are the Impacts of Credit Crunch on the Bank-Enterprise System? An Analysis Through Dynamic Modeling and an Italian Dataset," MPRA Paper 114349, University Library of Munich, Germany.

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    More about this item

    Keywords

    Cooperative Credit: SME Lending; Relationship Banking; Economic Systems; Financial Stability; Credit Market Structure;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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