Banking market structure, creation and activity of firms: Early evidence for co-operatives in the Italian case

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Abstract

This paper investigates whether local differences in banking competition impact on the creation and activity of firms, with a special focus on cooperatives. The empirical analysis, implemented on a sample of Italian firms, reveals non-monotonic effects of bank market power on firm creation and activity. In regard to the former, a bell-shaped relationship is found for both cooperative and non-cooperative firms, suggesting that a moderately concentrated banking market favors firms’ creation. A less homogeneous pattern characterizes firms’ activity: a bell-shaped parabola is still found for non-cooperative firms, while a U-shaped relationship emerges for cooperatives, showing that active coops benefit from a relatively more intense banking competition.
Original languageEnglish
Pages (from-to)605-640
JournalAnnals of Public and Cooperative Economics
Volume80
Issue number4
DOIs
Publication statusPublished - 2009

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