We investigate the extent to which local banking market characteristics can explain where small enterprises (SEs) are located and how they thrive. We start from a simple theory that explains the channels along which local banking market structure can affect the growth of SEs. Subsequently, we make use of a highly detailed data set, exploit unique features of the Italian banking system and find that the structure of the banking system explains the regional distribution of SEs in Italy, in particular through the historical presence of small banks.
|Series||GSBE Research Memoranda|
- g21 - "Banks; Depository Institutions; Micro Finance Institutions; Mortgages"
- r11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- c21 - "Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions"
- d40 - Market Structure and Pricing: General
- Market structure