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The Effectiviness Of The Network Theory In Improving The Contribution To Financial Innovation Of Italian Cooperative Banks

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  • MASSIMO ARNONE
  • MICHELE MODINA

Abstract

Purpose: In light of international financial and structural crisis the local banks should carry out a review of their business models and management approaches of their relationships with customers in order to strenghten their supply model with particular reference to innovative financial services and above all private equity services and to respond quickly to competitive pressures. In this regard, this paper intends to highlight how the network theory can allow the cooperative banks to become more competitive in order to sustain the Italian small-medium enterprises (SMEs). The research intends to verify if a structure - such as the cooperative banks' network - is able to enhance the degree of financial and strategic services such as private equity. Methodology/approach: The field research will be conducted in three steps. Step 1: the paper begins with the analysis of the literature available with particular reference to network theory and service management and following a short review on particular case of the technological districts and banking networks. Step 2: this step intend is part of the theme of the role that banks can engage in financing districts. After a review of the literature on this theme, a territorial survey will be carried out through a quantitative questionnaire will be addressed to cooperative banks in North, Central and South Italy to underline strategic guidelines to improve the diffusion of private equity in the modus operandi of these banks. Step 3: an empirical analysis will be conducted in order to verify how much the financial services falling within the business area of private equity transactions are common in the cooperative banks and especially in those banks that operate in technological districts. Findings: The main finding is to determine which key factors are fundamental for increasing the financial diversification of the cooperative banks' network and reinforcing its competitive position by adding innovation such as private equity services) while maintaining a strong relationship with SMEs. Practical implications The study provides both theoretical and practical insights into the advantageousness for the cooperative banks' network to follow the strategies and managerial implications to renew the business models of local banks in light of the financial crisis and Originality/value: This study provides empirical evidence of how a network system could allow the cooperative banks to improve innovation and competitiveness in the relationship with SMEs without alter their mutual identity of local banks.

Suggested Citation

  • Massimo Arnone & Michele Modina, 2013. "The Effectiviness Of The Network Theory In Improving The Contribution To Financial Innovation Of Italian Cooperative Banks," ERSA conference papers ersa13p829, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa13p829
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa13/ERSA2013_paper_00829.pdf
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    References listed on IDEAS

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    4. Bonaccorsi di Patti, Emilia & Gobbi, Giorgio, 2001. "The changing structure of local credit markets: Are small businesses special?," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2209-2237, December.
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    6. Caselli, Stefano, 2009. "Private Equity and Venture Capital in Europe," Elsevier Monographs, Elsevier, edition 1, number 9780123750266.
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    More about this item

    Keywords

    NETWORK; LOCAL BANKS; FINANCIAL CRISIS; DISTICTS; PRIVATE EQUITY;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services

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