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Financial development and local growth: evidence from highly disaggregated Italian data

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  • S. Destefanis
  • C. Barra
  • G. Lubrano Lavadera

Abstract

We test the nexus between local financial development and economic growth upon Italian data highly disaggregated at the territorial level, paying particular attention to the role of local banking market structure. We specify a growth model where a qualitative measure of financial development, bank profit efficiency, is considered in conjunction with a customary quantitative measure of financial development. The model is estimated on panel data over the period 2001 to 2010. The evidence suggests that both indicators of financial development have a significant impact on GDP per worker, especially when considering areas characterized by a larger number of cooperative banks. Results are not much affected by the occurrence of the ongoing recession.

Suggested Citation

  • S. Destefanis & C. Barra & G. Lubrano Lavadera, 2014. "Financial development and local growth: evidence from highly disaggregated Italian data," Applied Financial Economics, Taylor & Francis Journals, vol. 24(24), pages 1605-1615, December.
  • Handle: RePEc:taf:apfiec:v:24:y:2014:i:24:p:1605-1615
    DOI: 10.1080/09603107.2014.941529
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    Cited by:

    1. Raffaela Giordano & Sergi Lanau & Pietro Tommasino & Petia Topalova, 2015. "Does Public Sector Inefficiency Constrain Firm Productivity; Evidence from Italian Provinces," IMF Working Papers 15/168, International Monetary Fund.
    2. repec:bla:annpce:v:90:y:2019:i:1:p:103-139 is not listed on IDEAS
    3. Barra, Cristian & Zotti, Roberto, 2015. "Regional innovation system (in)efficiency and its determinants: an empirical evidence from Italian regions," MPRA Paper 67067, University Library of Munich, Germany.
    4. Francesco Aiello & Graziella Bonanno, 2018. "Multilevel empirics for small banks in local markets," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 1017-1037, November.
    5. Barra, Cristian & Zotti, Roberto, 2017. "On the relationship between bank market concentration and stability of financial institutions: Evidence from the Italian banking sector," MPRA Paper 79900, University Library of Munich, Germany.
    6. repec:taf:applec:v:48:y:2016:i:41:p:3912-3934 is not listed on IDEAS
    7. Zotti, Roberto & Barra, Cristian, 2014. "Human capital development, knowledge spillovers and local growth: Is there a quality effect of university efficiency?," MPRA Paper 60065, University Library of Munich, Germany.
    8. C. Barra, 2014. "Local financial development and economic growth: an outlook on italian territorial data," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1-2, pages 187-216.
    9. repec:kap:jbuset:v:151:y:2018:i:2:d:10.1007_s10551-016-3192-9 is not listed on IDEAS
    10. BARRA, Cristian & ZOTTI, Roberto, 2017. "Bank Performance, Financial Stability and Market Competition: do Cooperative and Non-Cooperative Banks Behave Differently?," CELPE Discussion Papers 143, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
    11. BARRA, Cristian & ZOTTI, Roberto, 2018. "Financial Stability as a Public Policy Goal to Increase Local Economic Development: an Empirical Investigation from Italian Labour Market Areas," CELPE Discussion Papers 154, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
    12. repec:kap:jtecht:v:43:y:2018:i:2:d:10.1007_s10961-016-9539-7 is not listed on IDEAS
    13. repec:gam:jijfss:v:6:y:2018:i:2:p:37-:d:138190 is not listed on IDEAS
    14. repec:sae:inrsre:v:40:y:2017:i:6:p:638-678 is not listed on IDEAS

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L89 - Industrial Organization - - Industry Studies: Services - - - Other

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