This paper is a study about local banks in Italy, with a special focus on the role these financial intermediaries have played before and during the crisis in lending to firms. Although in the literature there is not a clear consensus on the link between local banks and access to credit, our paper shows that the firms predominantly funded by local banks have been less rationed during the crisis. This result holds when we consider also the firm characteristics, the shape of the bank-firm relationship, and the features of the local credit market where the firm is located. This result supports the view that local banks may address firms' financial needs in a better way than not local banks because of their comparative advantage at collecting local information. This advantage appears to be relevant in a period of high risk aversion.

Does your neighbour know you better? Local banks and credit tightening in the financial crisis

BARBONI, GIORGIA;
2012-01-01

Abstract

This paper is a study about local banks in Italy, with a special focus on the role these financial intermediaries have played before and during the crisis in lending to firms. Although in the literature there is not a clear consensus on the link between local banks and access to credit, our paper shows that the firms predominantly funded by local banks have been less rationed during the crisis. This result holds when we consider also the firm characteristics, the shape of the bank-firm relationship, and the features of the local credit market where the firm is located. This result supports the view that local banks may address firms' financial needs in a better way than not local banks because of their comparative advantage at collecting local information. This advantage appears to be relevant in a period of high risk aversion.
2012
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11382/422992
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