The paper offers theoretical and empirical insights into the links between banks and firms in industrial districts and to the way investment is financed. Theoretically, it is assumed that district-banking localism is embedded in the industrial districtsÂ’ social context. District banks should thus be distinguished by such features as greater concentration of lending, greater concentration of market shares and the cooperative legal form. Counteracting forces (e.g. excessive risk taking, higher monitoring costs and the cooperativeÂ’s typical dilution of power among members) may nonetheless prevent district-banking localism from arising. The empirical analysis crosses an Istat dataset on local labour systems and industrial districts with banking supervisory data as of the end of 1991. Cooperative banks are found to concentrate their lending and to acquire larger market shares in industrial districts, though the evidence is not clear-cut. Mutual banks, on the other hand, generally concentrate their lending to small local labour systems, thereby indicating that their role as local banks is played not only in industrial districts but in non-district areas as well. Finally, in a regression analysis we find that investment by firms operating in industrial districts is more closely correlated with their cash-flow than those of non-district firms, although the pattern varies across regions and economic sectors. The conclusion is that the rise of district banking localism cannot be taken for granted and that IDs do not seem to be homogeneous entities even as far as bank-firm relationships are concerned.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages D21 - Microeconomics - - Production and Organizations - - - Firm Behavior G30 - Financial Economics - - Corporate Finance and Governance - - - General
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)