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Productivity, Credit Constraints and the Role of Short-Run Localization Economies: Micro-Evidence from Italy

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  • Roberto Ganau

Abstract

Ganau R. Productivity, credit constraints and the role of short-run localization economies: micro-evidence from Italy, Regional Studies. This paper investigates whether Italian manufacturing firms’ productivity is affected by credit constraints, and whether short-run localization economies foster productivity both directly and indirectly, moderating the negative effects of credit rationing via inter-firm credit relationships. Results suggest a negative effect of credit rationing on firms’ productivity, while a positive relationship exists between short-run localization economies and productivity. It emerges that location in an industrially concentrated area reduces firms’ investment-to-cash flow sensitivity, and that it positively moderates the negative effect of credit rationing on productivity. Moreover, the positive moderation effect seems to be increasing in the density of the local banking system.

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  • Roberto Ganau, 2016. "Productivity, Credit Constraints and the Role of Short-Run Localization Economies: Micro-Evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 50(11), pages 1834-1848, November.
    • Handle: RePEc:taf:regstd:v:50:y:2016:i:11:p:1834-1848
    DOI: 10.1080/00343404.2015.1064883
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    2. Guo, Yunxia & Yu, Mengyao & Xu, Mingchen & Tang, Ying & Huang, Jingran & Liu, Jia & Hao, Yu, 2023. "Productivity gains from green finance: A holistic and regional examination from China," Energy Economics, Elsevier, vol. 127(PA).
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    4. Giorgio Barba Navaretti & Anna Cecilia Rosso, 2023. "Access to capital markets and the geography of productivity leaders and laggards," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 64-113, January.
    5. Roberto Ganau & Andrés Rodríguez-Pose, 2022. "Credit constraints in European SMEs: does regional institutional quality matter?," Applied Economics Letters, Taylor & Francis Journals, vol. 29(15), pages 1388-1392, September.
    6. Vasilios Kanellopoulos & Georgios Fotopoulos, 2019. "The effect of knowledge spillovers on regional new firm formation: The Greek manufacturing case," Environment and Planning A, , vol. 51(4), pages 1005-1030, June.
    7. Navaretti, Giorgio Barba & Rosso, Anna, 2023. "Access to capital markets and the geography of productivity leaders and laggards," LSE Research Online Documents on Economics 126435, London School of Economics and Political Science, LSE Library.

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