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BANKING MARKET STRUCTURE, CREATION AND ACTIVITY OF FIRMS: EARLY EVIDENCE FOR COOPERATIVES IN THE ITALIAN CASE

Authors

  • Francesca Gagliardi

    1. The Business School, University of Hertfordshire, UK
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      I am grateful to Mariarosaria Agostino, Hulya Dagdeviren, Avinash K. Dixit, Giovanni Dosi, Elena Granaglia, Geoffrey M. Hodgson, Rosanna Nisticò, Douglass C. North, Francesco Trivieri, Ya Ping Yin, and two anonymous referees for their valuable comments and suggestions on earlier versions of this paper. All remaining shortcomings are mine. Email: f.gagliardi@herts.ac.uk.


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Abstract

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 favours 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 relatively more intense banking competition.

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