Banks and innovation: Microeconometric evidence on Italian firms☆ (original) (raw)
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Banking structure and regional economic growth: lessons from Italy
The Annals of Regional Science, 2005
Following the literature on the comparative advantage of small versus large banks at lending to small businesses, and in light of the worldwide decline in the number of intermediaries that specialize in this type of lending associated with deregulation in the banking industry, we examine the role that specific categories of banks have played in the context of Italy's regional economic growth. Over the estimation period, 1970-1993, which ends in the year of full implementation of the banking reform that introduced statutory de-specialization and branching liberalization, Italy featured not only a substantial presence of SME's in the real sector, as is still the case, but also a large and heterogeneous set of credit institutions with different ownership, size and lending styles. Exploiting these peculiarities we study the role of specific intermediaries and gather indirect evidence concerning the likely effects, ceteris paribus, of the current consolidation processes. The main findings, stemming from panel regressions with fixed effects, are as follows. The overall size of the financial sector has a weak impact on growth, but some intermediaries are better than others: Cooperative banks and Special credit institutions play a positive role, Banks of national interest (basically large private banks) and Public law banks (government-owned banks) either do not affect growth or have a negative influence depending on how growth is measured. Cooperative banks were mostly small banks and Special credit institutions were all but large conglomerates with standardized credit policies, hence our results lend support to the current worldwide concerns of a reduction in the availability of credit to SME's resulting from consolidation and regulatory reforms in the banking industry.
Financial innovation: theoretical issues and empirical evidence in Italy and in the UK
International Review of Economics, 2009
Financial innovation in banking has been a relevant topic since mid '70s. Nowadays, also due to the present financial systems situation, it comes to further relevance. In the first part of the paper, we try to clearly identify the phenomenon and draw a general framework. Despite the relevance of financial innovation, a unique definition is hard to find. We then provide empirical evidence of such innovations on a sample of European listed banks (Euronext, London Stock Exchange and Borsa Italiana) over the period 2005-2008 using annual reports information. First the absence of mentions of a specific organizational unit in charge of research and development is highlighted. However, the existence of an R&D function involving different organizational units cannot be excluded. Second, innovation seems to be mainly concentrated in the product area, in all stock exchanges considered. This could be accounted for by the difference in the "life cycles" of innovations and by the different operational conditions of banks in all systems. Third, larger banks seem more innovative. No clear relation between innovation and cost reduction/revenue increase seems to exist instead, in all countries. In the light of the above considerations, policy implication comes to light, on whether the choice of not establishing a specific organizational unit dedicated to R&D could turn out effective in the medium-long term.
Bank Size or Distance: What Hampers Innovation Adoption by SMEs?
Social Science Research Network, 2008
A growing body of research focuses on banking organizational issues, emphasizing the difficulties encountered by hierarchically organized banks in lending to borrowers/projects with high intensity of soft information. However, as the two extreme cases of hierarchical and non-hierarchical organizations are typically contrasted, what actually shapes the degree of hierarchy and how to measure it remain fairly vague. In this paper we compare bank size and distance between bank's branches and headquarter as possible sources of organizational frictions. In particular, we study the impact of distance and bank size on the firms' likelihood of introducing innovations and financing constraints on a sample of Italian SMEs. Our results show that firms located in provinces where the local banking system is functionally distant are less inclined to introduce innovations and are more likely to be credit rationed. Conversely, we find that the market share of large banks is only rarely statistically significant and when it is, the economic impact on the probability of introducing innovation and credit rationing is appreciably smaller than that of functional distance.
Finance and R&D Investment: A Panel Study of Italian Manufacturing Firms
International Journal of Economics and Finance, 2016
The purpose of this study is to examine the role of different sources of finance on R&D investment decisions in Italian manufacturing firms. Accounting data, taken from the Aida database, are collected over the 2006-2013 years. The empirical evidence shows that the availability of external financing primarily affects the decision to engage in R&D activity rather than R&D intensity. Internal cash flow, on the contrary, does affect both the likelihood of whether firms will undertake any R&D and the size of R&D spending. This impact is strongly significant for financially weaker firms, SMEs and high-tech firms. Due to greater asymmetric information problems, small innovative firms mainly rely on cash-flow to finance innovative projects. Since bank loans and other forms of debt are not well suited for R&D-intensive activities, our study would contribute to the debate whether it might be socially desirable to incentivize alternative small business financing options, still limited in Italy.
Evidence from Italian Firm-level Data
2011
Several empirical works have shown the robust and positive relation between growth and innovation at macroeconomic level and between firm economic performance and innovation at microeconomic level. However, the economists have had less opportunities to study such linkages during severe global downturns of the economic cycle. Moreover, the present disruptive economic downturn has forced the firms to implement survival strategies. One of such strategic behaviour regards the way of intervention on product and process areas through innovative actions. Focusing the attention on the micro level, the present work provides an empirical analysis on the basis of more than 500 Italian manufacturing firms located in Emilia-Romagna region, with the aim of disentangling the relations between pre-crisis innovation strategies with: on the one hand, firm economic performance during the crisis; on the other hand, innovative actions implemented to react to the recession’s challenges. The results sugge...
SOCIOLOGIA DEL LAVORO
In this paper the authors want to verify, in a sample of seven European countries, if there is a relationship between firm size and the ability to obtain product, process and organisational innovation. If such relationship exists, they try to understand if this may be attributed to a different allocation of key resources or to some "intrinsic" differences. Besides the analysis of the overall sample, the authors look specifically at Italy, making a comparison with the international context. The authors find that small firms (from 10 to 15 employees) have a disadvantage respect to medium and large firms in the innovative capacity; with partial exception of process innovation, this can be explained by a different allocation of key resources, like R&D, human capital and professional management. The international comparison let conclude that the above results substantially hold for Italy too; there are anyway some peculiarities medium (from 16 to 50 employees) Italian firms have an higher capacity in process innovation respect to the average of the sample, while all dimensional classes suffer in organisational innovation; in the end, in all kinds of innovation the distance between small and medium/large firms in Italy is not significantly different than the average of the sample.
Productivity, innovation and R&D: Micro evidence for Italy
European Economic Review, 2006
By exploiting a rich firm level data-base, this paper presents novel empirical evidence on the effect of process and product innovations on productivity, as well as on the role played by R&D and fixed capital investment in enhancing the likelihood of introducing innovations at the firm level. Our results imply that process innovation has a large impact on productivity. Furthermore, R&D spending is strongly positively associated with the probability of introducing a new product, whereas fixed capital spending increases the likelihood of introducing a process innovation. The latter result might reflect the fact that new technologies are frequently embodied in new capital goods. However, the effect of fixed investment on the probability of introducing a process innovation is magnified by R&D spending internal to the firm. This implies that R&D can affect productivity growth by facilitating the absorption of new technologies. r