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Local Banking and Local Economic Growth in Italy: Some Panel Evidence

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  • Guglielmo Maria Caporale
  • Stefano Di Colli
  • Roberto Di Salvo
  • Juan Sergio Lopez

Abstract

This paper provides new evidence on the contribution of local banking to local economic growth (i.e. at county level – the Italian “province”) in Italy. A comprehensive dataset is used, which includes control variables for social capital and human capital as well as indicators of the quality of local infrastructures and the production structure of the local economy. A linear within-estimator technique with fixed effects is applied to a modified version of the so-called Barro regression (Cecchetti and Karrhoubi, 2013) in order to address the well-known econometric issues of reverse causality and estimation bias resulting from unobserved district-specific influences.

Suggested Citation

  • Guglielmo Maria Caporale & Stefano Di Colli & Roberto Di Salvo & Juan Sergio Lopez, 2014. "Local Banking and Local Economic Growth in Italy: Some Panel Evidence," Discussion Papers of DIW Berlin 1409, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1409
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    Cited by:

    1. Ibrahim M. Awad & Mohammed S. Karaki, 2019. "The impact of bank lending on Palestine economic growth: an econometric analysis of time series data," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 5(1), pages 1-21, December.
    2. Yue Hu & Siwei Lu & Huiyuan Zhang & Guibo Liu & Jiangang Peng, 2021. "Empirical Analysis on the Performance of Rural Credit Cooperative’s Shareholding Reform Based on the Rationale of Isomorphic Incentive Compatibility," Sustainability, MDPI, vol. 13(5), pages 1-29, March.
    3. Giuseppe Terzo, 2022. "The economic impact of social entrepreneurship: an exploratory analysis of the linkage between social cooperation and local growth in Italy," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 76(3), pages 17-28, July-Sept.

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    More about this item

    Keywords

    Bank lending; local growth; panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G01 - Financial Economics - - General - - - Financial Crises
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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