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Geographical Organization of Banking Systems and Innovation Diffusion

Author

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  • Pietro Alessandrini

    (Universit… Politecnica delle Marche, MoFiR)

  • Andrea Filippo Presbitero

    (Universit… Politecnica delle Marche, MoFiR)

  • Alberto Zazzaro

    (Universit… Politecnica delle Marche, MoFiR)

Abstract

The empirical literature is largely supportive of the importance of financial constraints and identifies local banking development and relationship lending as possible determinants of firms’ propensity to innovate. In this chapter, we argue that the spatial organization of banking systems and the distance of local branches from banks’ decisional centers are major factors influencing the effectiveness in collecting and processing soft information on local innovative firms. We provide evidence showing that, while branch density and the length of credit relationships have a positive causal effect on innovation when considered singularly, after controlling for the functional distance between the banking system and the local economy they lose statistical significance in favor of the latter. In this perspective, our results suggest that the geographical organization of banks and the spatial distribution of their headquarters represent key variables for local development.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Pietro Alessandrini & Andrea Filippo Presbitero & Alberto Zazzaro, 2008. "Geographical Organization of Banking Systems and Innovation Diffusion," Mo.Fi.R. Working Papers 3, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    • Handle: RePEc:anc:wmofir:3
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    References listed on IDEAS

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    Cited by:

    1. Franz Flögel, 2018. "Distance and Modern Banks’ Lending to SMEs: Ethnographic Insights from a Comparison of Regional and Large Banks in Germany," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 35-57.
    2. Luca Papi & Emma Sarno & Alberto Zazzaro, 2017. "The geographical network of bank organizations: issues and evidence for Italy," Chapters, in: Ron Martin & Jane Pollard (ed.), Handbook on the Geographies of Money and Finance, chapter 8, pages 156-196, Edward Elgar Publishing.
    3. Gärtner, Stefan & Fernández, Jorge, 2018. "The banking systems of Germany, the UK and Spain form a spatial perspective: The Spanish case," IAT Discussion Papers 18/02, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.
    4. Gärtner, Stefan & Flögel, Franz, 2014. "Call for a Spatial Classification of Banking Systems through the Lens of SME Finance - Decentralized versus Centralized Banking in Germany as an Example," IAT Discussion Papers 14/01, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.
    5. Mariarosaria Agostino & Sabrina Ruberto & Francesco Trivieri, 2018. "Lasting lending relationships and technical efficiency. Evidence on European SMEs," Journal of Productivity Analysis, Springer, vol. 50(1), pages 25-40, October.
    6. Flögel, Franz, 2016. "Distance and Modern Banks' Lending to SMEs: Decentralised versus Centralised Banking in Germany," IAT Discussion Papers 16/01, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.
    7. Gärtner, Stefan & Flögel, Franz, 2014. "Call for a Spatial Classification of Banking Systems through the Lens of SME Finance - Decentralized versus Centralized Banking in Germany as an Example," EconStor Preprints 97512, ZBW - Leibniz Information Centre for Economics.
    8. B. Fernández-Olit & C. Ruza & M. Cuesta-González & M. Matilla-Garcia, 2019. "Banks and Financial Discrimination: What Can Be Learnt from the Spanish Experience?," Journal of Consumer Policy, Springer, vol. 42(2), pages 303-323, June.

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