Banks and Regional Development: An Empirical Analysis on the Determinants of Credit Availability in Brazilian Regions

Crocco, Marco; Silva, Fernanda Faria; Paulo-Rezende, Luiz; Rodríguez-Fuentes, Carlos J.

doi:10.1080/00343404.2012.697141

Cited by 18 publications

(21 citation statements)

References 20 publications

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“…This may be related to Post-Keynesian liquidity preference theory, as in Dow (1992Dow ( , 1999, and empirical findings elsewhere. For example, both the Crocco et al (2014) study and our study point to a differentiation of banking strategy, whereby banks in more developed regions tend to lend less to agents in more remote, under-developed regions. This may reflect a preference for liquidity arising from economic uncertainty and perceived customer risk; thus, the 'financially-defensive behaviour' of banks may be an important part of the over and under-extension of regional credit (Dow, 1992 p. 662).…”

Section: Discussionmentioning

confidence: 60%

“…Moreover, the view emerging from the empirical literature is that spatial financialisation, in terms of uneven regional financial sector development and accumulation, may be linked to the growing north-south divide. See, for example, Martin and Minns (1995) for the United Kingdom; Rodriguez-Fuentes (1998) for Spain; Dow et al (2012) for Italy; Crocco et al (2014) for Brazil. 2 In particular, this process may be beneficial for certain agents, namely those located in centralised financial hubs; however, it may disadvantage agents in more remote, periphery regions.…”

Section: Introductionmentioning

confidence: 99%

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Regional financialisation and financial systems convergence: Evidence from Italy

2016

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Abstract:The term 'financialisation' has now entered the lexicon of academics and policy makers, though there is still no agreement on its meaning and significance. One of the earlier definitions was offered by Epstein (2005; see also Krippner, 2005), who referred to the growing weight of financial motives, financial actors and markets in the operation of modern economies, both at the national and international level, from the early 1980s until today. Building on this definition, this paper sheds further light on the implications of spatial financialisation, which has been associated with the over and under-extension of credit across and within countries and evolving financial instability. The paper's primary contribution is to extend in a robust manner a powerful panel data convergence testing methodology to analyse the spatial scale and temporal evolution of Italian regional lending conditions. The paper concludes that financial divergence has broadly increased in Italian regions. Furthermore, we are able to link regional financialisation to the growing north-south divide in a significant and meaningful way. As a result the ability of southern regions in Italy to absorb adverse macroeconomic and financial shocks has been weakened. Relevant regional financial policies have thereby become very important.

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Section: Discussionmentioning

confidence: 60%

Section: Introductionmentioning

confidence: 99%

Regional financialisation and financial systems convergence: Evidence from Italy

2016

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“…Despite this evidence base, relatively fewer studies have considered regional variation in these patterns of financing. However, there is increasing interest in the idea that regional factors, such as the level of banking development or innovation intensity may matter for firm financing (Crocco et al, 2012;Munari and Toschi, 2015). Studies on IPO's, for example, suggest that underpricing is more likely the further the firm is located from the financial capital (Acconcia et al, 2011).…”

Section: Geographical Context and Financing High-technology Firmsmentioning

confidence: 99%

The innovation debt penalty: Cost of debt, loan default, and the effects of a public loan guarantee on high-tech firms

Cowling

Ughetto

Lee

2018

Technological Forecasting and Social Change

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High-technology firms per se are perceived to be more risky than other, more conventional, firms. It follows that financial institutions will take this into account when designing loan contracts, and that this will manifest itself in more costly debt. In this paper we empirically test whether the provision of a government loan guarantee fundamentally changes the way lenders price debt to high-tech firms. Further, we also examine whether there are differential loan price effects of a public guarantee depending on the nature of the firms themselves and the nature of the economic and innovation environment that surrounds them. Using a large UK dataset of 29,266 guarantee backed loans we find that there is a high-tech risk premium which is justified by higher default, but, in general, that this premium is altered significantly when a public guarantee is provided for all firms. Further, all these loan price effects differ on precise spatial economic and innovation attributes

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“…A number of contributions in the post-Keynesian tradition have analyzed the endogenous emergence and reproduction of a spatial core-periphery structure in national banking systems (Chick and Dow 1988;Dow 1999;Chick et al 2013;Crocco et al 2014). However, the sharp dichotomy between center and periphery does not allow these authors to explore the whole complexity of the spatial network of bank power and organizations.…”

Section: … and What We Do Not Knowmentioning

confidence: 99%

The geographical network of bank organizations: issues and evidence for Italy

Papi¹,

Sarno²,

Zazzaro³

2017

Handbook on the Geographies of Money and Finance

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The evolution of the banking industry has always been affected by recurrent waves of technological, regulatory and organizational changes. All such changes have significant effects on the spatial organization of banks, the interconnectedness of geographical credit markets and the core-periphery structure of banking industry. In this chapter, we review the literature on the effects of geographical distances between the key actors of the credit market (the borrowing firm, the lending branch, the lending bank, and rival banks) on lending relationships and interbank competition. Using the metrics and graph techniques for network analysis we then provide evidence concerning the evolving geographical network of bank organizations in Italy.

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Banks and Regional Development: An Empirical Analysis on the Determinants of Credit Availability in Brazilian Regions

Cited by 18 publications

References 20 publications

Regional financialisation and financial systems convergence: Evidence from Italy

Regional financialisation and financial systems convergence: Evidence from Italy

The innovation debt penalty: Cost of debt, loan default, and the effects of a public loan guarantee on high-tech firms

The geographical network of bank organizations: issues and evidence for Italy

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