CREDIT RATIONING AND FIRMS’SIZE: EXPLORATORY ANALYSIS OF THE EFFECT OF THE GREAT RECESSION (2010-2016) IN ITALY

• Authors: Ferrara Maria , Marzano Elisabetta , Rubinacci Roberta
• Languages of publication: EN

Abstracts

EN

In this paper we investigate the evidence of credit rationing in Italy during the period 2010-2016 characterized by evere distress in the banking system. The role of banks in the Italian economic system is crucial, since the Italian financial system can be classified as a bank oriented one. In addition, Italian economy is characterized by a very large share of small and medium sized enterprises (SMEs). This aspect adds value to our analysis given that literature usually assumes that the smaller the firms size the larger they suffer from credit rationing. By using a unique data set, provided by Bank of Italy, we get a twofold result. First, in Italy, the last economic and financial crisis has reduced the access to banking loans for SMEs, since there is a clear hump-shaped pattern in the time series of our measures of credit rationing. Differently, for large firms, it seems to have caused a larger volatility rather than a veritable credit rationing. Second, and this is our main result, matching micro and macro data, we do find support to the intuition that different banking crises exert different effects on firms’ financing conditions.

Keywords

EN

credit rationing; small and medium-sized enterprises (SMEs); Italian Banking System; banking crisis

• Publisher: Katedra Ekonometrii i Statystyki, Szkoła Główna Gospodarstwa Wiejskiego w Warszawie
• Journal: Metody Ilościowe w Badaniach Ekonomicznych
• Year: 2018
• Volume: 19
• Issue: 4
• Pages: 347-354

Contributors

author

Ferrara Maria

• Department of Economic and Legal Studies University of Naples Parthenope, Italy

author

Marzano Elisabetta

• Department of Economic and Legal Studies University of Naples Parthenope, Italy

author

Rubinacci Roberta

• Department of Economic and Legal Studies University of Naples Parthenope, Italy

References

• Angelini P., Di Salvo R., Ferri G. (1998) Availability and Cost of Credit for Small Businesses: Customer Relationships and Credit Cooperatives. Journal of Banking & Finance, 22, 925-954.
• Angelini P., Generale A. (2008) On the Evolution of Firm size Distribution. American Economic Review, 98, 426-438.
• Bank of Italy (2018) Survey of Industrial and Service Firms. https://www.bancaditalia.it/statistiche/basi-dati/bird/.
• Bartoletto S., Chiarini B., Marzano E., Piselli P. (2018) Banking Crises and Business Cycle: Evidence for Italy (1861-2016). Journal of Financial Economic Policy, doi: 10.1108/JFEP-03-2018-0055.
• Cenni S., Monferrà S., Salotti V., Sangiorgi M., Torluccio G. (2015) Credit Rationing and Relationship Lending. Does Firm Size Matter? Journal of Banking & Finance, 249-265.
• Costa S., Malgarini M., Margani P. (2012) Access to Credit for Italian Firms: New Evidence from the ISTAT Confidence Business Surveys. MPRA Paper 41389, University Library of Munich, Germany.
• Gertler M., Gilchrist S. (1994) Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms. The Quarterly Journal of Economics, Oxford University Press, 109(2), 309-340.
• Wehinger G. (2014) SMEs and the Credit Crunch: Current Financing Difficulties, Policy Measures and a Review of Literature. OECD Journal: Financial Market Trends, 2013/2, https://doi.org/10.1787/fmt-2013-5jz734p6b8jg.