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Mo.Fi.R. Working Papers (2009)

 
 

Mo.Fi.R. Working Papers (>> Mo.Fi.R. website)
 
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34  Giulia Bettin, Riccardo Lucchetti, Alberto Zazzaro
Income, consumption and remittances: evidence from immigrants to Australia [novembre 2009]
Keywords:
  Double-hurdle model, migation, remittances
JEL Classification:
  C21- Mathematical and Quantitative Methods – Single Equation Models; Single Variables – Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
  C24- Mathematical and Quantitative Methods – Single Equation Models; Single Variables – Truncated and Censored Models; Switching Regression Models
  F22- International Economics – International Factor Movements and International Business – International Migration
  F24- International Economics – International Factor Movements and International Business – Remittances
Abstract:
  For many countries, remittance behaviour by migrants is an important component of their overall international financial flows. To date, the empirical literature has analysed the propensity to remit as a function of migrants’ socio-economic characteristics. However, no studies have fully addressed the empirical implications of remittance behaviour being determined in the broader context of migrants’ labour, income and consumption allocation strategy. On the contrary, the migrant’s income has almost always been treated as exogenous in this context. The aim of this study is to estimate a remittance equation that detects the main determinants of remittance behaviour while addressing endogeneity and reverse causality relationships between remittances, income, consumption and savings. Moreover, since a large share of individuals do not remit money at all, an instrumental variable variant of the double-hurdle selection model is proposed and estimated by LIML. A sending country perspective is adopted in the empirical analysis by considering the first cohort of the Longitudinal Survey of Immigrants to Australia. We find that endogeneity is substantial and that estimates obtained by the methods previously employed in the literature may be very misleading if given a behavioural interpretation. Our results confirm some theoretical predictions and shed light on others; notably, we show that “selfish” motives in remitters are at least as important as “altruistic” motives.
Citations:   CitEc
 
33  Giovanni Busetta, Alberto Zazzaro
Mutual Loan-Guarantee Societies in Monopolistic Credit Markets with Adverse Selection [novembre 2009]
Keywords:
  Collateral, Group formation, Mutual Loan Guarantee Society, Small business lending
JEL Classification:
  D82- Microeconomics – Information, Knowledge, and Uncertainty – Asymmetric and Private Information
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Abstract:
  In many countries, Mutual Loan-Guarantee Societies (MLGSs) are assuming ever-increasing importance for small business lending. In this paper we provide a theory to rationalise the raison d’^etre of MLGSs. The basic intuition is that the foundation for MLGSs lies in the inefficiencies created by adverse selection, when borrowers do not have enough collateralisable wealth to satisfy collateral requirements and induce self-selecting contracts. In this setting, we view MLGSs as a wealth-pooling mechanism that allows otherwise inefficiently rationed borrowers to obtain credit. We focus on the case of large, complex urban economies where potential entrepreneurs are numerous and possess no more information about each other than do banks. Despite our extreme assumption on information availability, we show that MLGSs can be characterized by assortative matching in which only safe borrowers have an incentive to join the mutual society.
Citations:   CitEc
 
32  Marco Cucculelli, Francesco Marchionne
Market Opportunities and the Owner Identity. Are Family Firms different? [ottobre 2009]
Keywords:
  family firms, optimal size class, owner identity, performance
JEL Classification:
  D21- Microeconomics – Production and Organizations – Firm Behavior: Theory
  G32- Financial Economics – Corporate Finance and Governance – Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
  L11- Industrial Organization – Market Structure, Firm Strategy, and Market Performance – Production, Pricing, and Market Structure; Size Distribution of Firms
  L25- Industrial Organization – Firm Objectives, Organization, and Behavior – Firm Performance: Size, Diversification, and Scope
  L26- Industrial Organization – Firm Objectives, Organization, and Behavior – Entrepreneurship
Abstract:
  We test the hypothesis that the identity of the owner affects firm ability to seize market opportunities differently according to the firm’s actual vs. “optimal” size (size gap). By grouping firms in size clusters having a similar probability of adopting a size-adjusting strategy (growth or downsizing), we measure how the sensitivity of firm sales to demand shocks changes in response to the difference in owner identity and the firm size gap. We use data from a panel of 7,459 continental western European firms over the period 1995-2004 and Eurostat 3-digit sectoral data on firm size distribution in Europe. Our findings show that family business sales are less sensitive to market demand than other firms, particularly when the actual firm size is larger than optimal size.
Citations:   CitEc
 
31  Andrea Bellucci, Alexander V. Borisov, Alberto Zazzaro
Does Gender Matter in Bank-Firm Relationships? Evidence from Small Business Lending [ottobre 2009]
Keywords:
  Female-owned enterprises, Gender-based discrimination, Loan officers
JEL Classification:
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  G32- Financial Economics – Corporate Finance and Governance – Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
  J16- Labor and Demographic Economics – Demographic Economics – Economics of Gender; Non-labor Discrimination
Abstract:
  In this paper we study the relevance of the gender of the contracting parties involved in lending. We show that female entrepreneurs face tighter access to credit, even though they do not pay higher interest rates. The effect is independent of the information available about the borrower and holds if we control for unobservable individual effects. The gender of the loan officer is also important: we find that female officers are more risk-averse or less self-confident than male officers as they tend to restrict credit availability to new, unestablished borrowers more than their male counterparts.
Citations:   CitEc
 
30  Michele Fratianni, Francesco Marchionne
Rescuing Banks from the Effects of the Financial Crisis [settembre 2009]
Keywords:
  announcements, financial crisis, rescue plan, undercapitalization
JEL Classification:
  G1- Financial Economics – General Financial Markets
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  N20- Economic History – Financial Markets and Institutions – General, International, or Comparative
Abstract:
  This paper examines government policies aimed at rescuing banks from the effects of the great financial crisis of 2007-2009. To delimit the scope of the analysis, we concentrate on the fiscal side of interventions and ignore, by design, the monetary policy reaction to the crisis. The policy response to the subprime crisis started in earnest after Lehman’s failure in mid September 2008, accelerated after February 2009, and has become very large by September 2009. Governments have relied on a portfolio of intervention tools, but the biggest commitments and outlays have been in the form of debt and asset guarantees, while purchases of bad assets have been very limited. We employ event study methodology to estimate the benefits of government interventions on banks and their shareholders. Announcements directed at the banking system as a whole (general) and at specific banks (specific) were priced by the markets as cumulative abnormal rates of return over the selected window periods. General announcements tend to be associated with positive cumulative abnormal returns and specific announcements with negative ones. General announcements exert cross-area spillovers but are perceived by the home-country banks as subsidies boosting the competitive advantage of foreign banks. Specific announcements exert spillovers on other banks. Our results are also sensitive to the information environment. Specific announcements tend to exert a positive impact on rates of return in the pre-crisis sub-period, when announcements are few and markets have relative confidence in the “normal” information flow. The opposite takes place in the turbulent crisis sub-period when announcements are the order of the day and markets mistrust the “normal” information flow. These results appear consistent with the observed reluctance of individual institutions to come forth with requests for public assistance.
Citations:   CitEc
 
29  Andrea Filippo Presbitero
The 2008-2009 Financial Crisis and the HIPCs: Another Debt Crisis? [settembre 2009]
Citations:   CitEc
 
28  Giulia Bettin, Alberto Zazzaro
Remittances and Financial Development: Substitutes or Complements in Economic Growth? [settembre 2009]
Keywords:
  bank efficiency, economic growth, financial development, migrants’ remittances
JEL Classification:
  F22- International Economics – International Factor Movements and International Business – International Migration
  F43- International Economics – Macroeconomic Aspects of International Trade and Finance – Economic Growth of Open Economies
  O16- Economic Development, Technological Change, and Growth – Economic Development – Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Govern
Abstract:
  In a recent study, Chami et al. (2003) suggested that remittances can have a negative impact on economic growth of the receiving country by diminishing the work effort of the migrants’ relatives. Subsequently, Giuliano and Ruiz-Arranz (2009) found that this moral hazard effect emerges only when financial development is low. In this paper, we introduce a new indicator of financial development measuring the efficiency domestic banking system and show that the impact of remittances on economic growth is negative (positive) in countries where bank efficiency is low (high). This complementarity result is robust to controls for other financial development and institutional quality indicators.
Citations:   CitEc
 
27  Andrea Filippo Presbitero
La crisi 2007-?: Fatti, ragioni e possibili conseguenze [luglio 2009]
Keywords:
  Crisi finanziaria, Disuguaglianze, Mutui subprime
JEL Classification:
  E44- Macroeconomics and Monetary Economics – Money and Interest Rates – Financial Markets and the Macroeconomy
  G20- Financial Economics – Financial Institutions and Services – General
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Abstract:
  Come è stato possibile che la crisi di un settore marginale della finanza statunitense si sia propagata così rapidamente non solo alle altre economie avanzate, ma anche alle economie emergenti e in via di sviluppo, e abbia determinato conseguenze tanto gravi da indurre molti paesi a ripensare il ruolo dello Stato nell’economia? Questo lavoro prova a rispondere a questa domanda fornendo una chiave di lettura della situazione attuale, traendo spunto da una letteratura molto vasta ed in continua espansione. Vengono messe in luce le diverse cause della crisi e si confronta l’esperienza corrente con le crisi del passato per desumerne utili indicazioni sulle possibili conseguenze negli anni a venire. In particolare, l’intensità e la scala globale della crisi hanno evidenziato alcune debolezze nel funzionamento dell’economia capitalistica che hanno radici sia in fenomeni strettamente economici, sia in altre trasformazioni della nostra società che hanno meno a che vedere con l’economia e più con aspetti culturali.
Citations:   CitEc
 
26  Pietro Alessandrini, Michele Fratianni
International Monies, Special Drawing Rights, and Supernational Money [luglio 2009]
Keywords:
  Special Drawing Right, international monetary system, international money, supernational bank money
JEL Classification:
  E42- Macroeconomics and Monetary Economics – Money and Interest Rates – Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
  E52- Macroeconomics and Monetary Economics – Monetary Policy, Central Banking, and the Supply of Money and Credit – Monetary Policy
  F33- International Economics – International Finance – International Monetary Arrangements and Institutions
  F36- International Economics – International Finance – Financial Aspects of Economic Integration
Abstract:
  The current international monetary system (IMS) is fragile because the dollar standard is rapidly deteriorating. The dual role the dollar as the dominant international money and national money cannot be easily reconciled because the US monetary authorities face a conflict between pursuing domestic objectives of employment and inflation and maintaining the international public good of a stable money. To strengthen the IMS, China has advocated the revitalization of the Special Drawing Rights (SDRs). But SDRs are neither money nor a claim on any international institution; are issued exogenously without any consideration to countries’ financing needs; and can activate international monies only though bilateral transactions. The historical record of SDRs as international reserves is altogether unimpressive. We propose instead the creation of a supernational bank money (SBM) within the institutional setting of a clearing union. This union would be a full-fledged agreement by participating central banks on specific rules of the game, such as size and duration of overdrafts, designation of countries that would have to bear the burden of external adjustment, and coordination of monetary policies objectives and at expense of the maintenance of the international public good. We also discuss structural changes that would make SDRs converge to SBMs.
Citations:   CitEc
 
25  Domenico Scalera, Alberto Zazzaro
Do Inter-Firm Networks Make Access to Finance Easier? Issues and Empirical Evidence [luglio 2009]
Abstract:
  Does participation in inter-firm networks make access to credit easier for firms? Is finance a motivation driving the formation of inter-firm networks? During the last twenty years these two questions have been hotly debated by economists both theoretically and empirically. In this paper, we selectively review the literature on inter-firm networking, internal capital markets and access to external credit.
Citations:   CitEc
 
24  Marco Cucculelli
Owner Identity and Firm Performance: Evidence from European Companies [maggio 2009]
JEL Classification:
  G32- Financial Economics – Corporate Finance and Governance – Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
  L25- Industrial Organization – Firm Objectives, Organization, and Behavior – Firm Performance: Size, Diversification, and Scope
Abstract:
  Empirical evidence of the distribution of firms based on owner identity for a set of European countries reveals substantial differences. Using the sensitivity of a firm’s sales to demand shocks as a measure of risk-taking behavior, the paper explores if owner identity affects the willingness of the firms to take risk in order to improve their current situation (venturing risk). Consistent with a hypothesis of risk-avoidance behavior, small- and medium-sized family-owned companies appear to under-react to changes in market demand, notably when ownership is highly concentrated and growth options are significant. However, they confirm their status of good performers when pure profitability measures are used. Conversely, industrial- and nonconcentrated family-owned firms appear more prone to deal with venturing risk, especially when the intensity of the risk is large as in the case of fast-growing companies or demand changes in nondomestic markets.
Citations:   CitEc
 
23  Michele Fratianni, Francesco Marchionne
The Role of Banks in the Subprime Financial Crisis [aprile 2009]
Keywords:
  accounting, banks, credit, crisis, fair values, risk aversion, undercapitalization
JEL Classification:
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  N20- Economic History – Financial Markets and Institutions – General, International, or Comparative
Abstract:
  The ultimate point of origin of the great financial crisis of 2007-2009 can be traced back to an extremely indebted US economy. The collapse of the real estate market in 2006 was the close point of origin of the crisis. The failure rates of subprime mortgages were the first symptom of a credit boom tuned to bust and of a real estate shock. But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. The latter had become fragile as a result of several factors that are unique to this crisis: the transfer of assets from the balance sheets of banks to the markets, the creation of complex and opaque assets, the failure of ratings agencies to properly assess the risk of such assets, and the application of fair value accounting. To these novel factors, one must add the now standard failure of regulators and supervisors in spotting and correcting the emerging weaknesses. Accounting data fail to reveal the full extent of the financial maelstrom. Ironically, according to these data, US banks appear to be still adequately capitalized. Yet, bank undercapitalization is the biggest stumbling block to a resolution of the financial crisis.
Citations:   CitEc
 
22  Alessandro Gambini, Alberto Zazzaro
Who Captures Who? Long-Lasting Bank Relationships and Growth of Firms [aprile 2009]
Keywords:
  capture effects, firms’ growth, relationship lending
JEL Classification:
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  G34- Financial Economics – Corporate Finance and Governance – Mergers; Acquisitions; Restructuring; Corporate Governance
Abstract:
  The theoretical literature had identified potential benefits and costs of close bank-firm relationships for both parties, suggesting possible reasons for firms being vaptured by banks and vice versa. In this paper we empirically explore the effects of long-lasting credit relationships on employment and asset growth of a large sample of Italian manufacturing firms in the period 1998-2003. The main findings are that relationships lending hampers the effort of small firms to increase their size (especially in terms of employees), while it mitigates the negative growth of troubled, medium-large enterprises, thus supporting the hypotesis that small firms are captured by banks which, in turn, are captured by large firms.
Citations:   CitEc
 
21  Marco Cucculelli, Giacinto Micucci
The Age Effect of Entrepreneurship: Founder’s Tenure, Firm Performance and the Economic Environment [marzo 2009]
Keywords:
  ageing, changing environment, entrepreneurship, founder-run firms
JEL Classification:
  G34- Financial Economics – Corporate Finance and Governance – Mergers; Acquisitions; Restructuring; Corporate Governance
  J24- Labor and Demographic Economics – Demand and Supply of Labor – Human Capital; Skills; Occupational Choice; Labor Productivity
  L25- Industrial Organization – Firm Objectives, Organization, and Behavior – Firm Performance: Size, Diversification, and Scope
Abstract:
  This paper tests the effect of founder’s tenure on firm performance by taking into account the impact of the changes occurring in the economic environment. We use a large dataset of founder-run firms that includes, in addition to financial data, company data directly collected through a survey of about 2,000 Italian firms. Unlike the negative relationship reported in most empirical papers, we found an inverted U-shaped relationship between founder-CEO tenure and firm performance. This relationship is strongly influenced by the characteristics of the environment in which the company competes: while experience plays a key role in fostering performance in less innovativeand less competitive sectors, a dynamic environment makes the performance of the firm less responsive to the benefits of founder tenure. From the viewpoint of policy, growing environment dynamism calls for greater efficiency of the market for corporate control, in order to assure a continued match between skills of CEOs and the external environment.
Citations:   CitEc
 
20  Michele Fratianni, Francesco Marchionne
The Limits to Integration [marzo 2009]
Keywords:
  continental blocs, culture, geography, institutions, integration, regional trade agreements
JEL Classification:
  F13- International Economics – Trade – Trade Policy; International Trade Organizations
  F15- International Economics – Trade – Economic Integration
  F18- International Economics – Trade – Trade and Environment
Abstract:
  Distance and national borders are a big hurdle to the expansion of cross-border trade. Further constraints on integration come from heterogeneity in culture and institutions and from the forces of geography, defined as continents and oceans. Of the three sets of factors, the forces of geography are the most potent on integration. Continents act as ‘natural’ integrators and oceans as common water border. Countries in the same continent trade a quarter more than those located in different continents; and countries sharing the same ocean trade a half more than those that do not have a common water border. A certain degree of substitution exists between the effects on trade of continents and regional trade agreements (RTAs). This substitution is most evident in the presence of political blocs like the Soviet Union. With an active political bloc, the continent loses some of its integration property, leaving more room for the sub-continental RTA to enhance trade. When the political bloc withers away, on the other hand, the continent rises as an integration force relative to the RTA.
Citations:   CitEc
 
19  David Bartolini, Alberto Zazzaro
Are antitrust fines friendly to competition? An endogenous coalition formation approach to collusive cartels [febbraio 2009]
Keywords:
  Antitrust policy, Coalition formation, Collusive cartels
JEL Classification:
  C70- Mathematical and Quantitative Methods – Game Theory and Bargaining Theory – General
  L40- Industrial Organization – Antitrust Issues and Policies – General
  L41- Industrial Organization – Antitrust Issues and Policies – Monopolization; Horizontal Anticompetitive Practices
Abstract:
  A well-established result of the theory of antitrust policy is that it might be optimal to tolerate some degree of collusion among firms if the authority in charge is constrained by limited resources and imperfect information. However, few doubts are cast on the common opinion by which stricter enforcement of antitrust laws definitely makes market structure more competitive and prices lower. In this paper we challenge this presumption of effectiveness and show that the introduction of a positive (expected) antitrust fine may drive firms from partial cartels to a monopolistic cartel. Moreover, introducing uncertainty on market demand, we show that the socially optimal competition policy can call for a finite or even zero antitrust penalty even if there are no enforcement costs. We first show our results in a Cournot industry with five symmetric firms and a specilc rule of cartel formation. Then we extend the analysis to the case of N symmetric firms and a generic rule of coalition formation. Finally, we consider;the case of asymmetric firms and show that our results still hold for an industry;populated by one Stackelberg leader and two followers.
Citations:   CitEc
 
18  David Bartolini, Alberto Zazzaro
The Anticompetitive Effects of the Antitrust Policy [febbraio 2009]
Citations:   CitEc
 
17  Manuel Illueca, Lars Norden, Gregory F. Udell
Liberalization, Corporate Governance, and Savings Banks [febbraio 2009]
Keywords:
  Banck branching, Bank lending, Deregulation, Distance, Geographic expansion
JEL Classification:
  G10- Financial Economics – General Financial Markets – General
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  G30- Financial Economics – Corporate Finance and Governance – General
  H11- Public Economics – Structure and Scope of Government – Structure, Scope, and Performance of Government
  L30- Industrial Organization – Nonprofit Organizations and Public Enterprise – General
Abstract:
  We study the effects of the interplay between banking deregulation and corporate governance on the lending behavior of savings banks in Spain. The removal of branching barriers that constrained these banks has led to a nationwide expansion, increasing the number of their branches and their commercial lending volume dramatically. Analyzing a unique data set combining information on the geographic distribution of bank branches and matched lenderborrower financial statements during 1996-2004, we provide evidence that suggests that the governance of those banks affects the way in which they expand their lending activities. In particular, political influence affects where they expand and their ex ante risk taking behavior. Because most countries have a portion of their banking system that is not privately owned, the behavior of these Spanish savings banks may have broader implications about the impact of global banking deregulation and industry consolidation and their interaction with bank governance.
Citations:   CitEc
 
16  Hirofumi Uchida, Gregory F. Udell, Nobuyoshi Yamori
Loan Officers and Relationship Lending to SMEs [febbraio 2009]
Keywords:
  Relationship lending, Small- and medium-sized enterprises, hierarchical organizations, soft information
JEL Classification:
  D82- Microeconomics – Information, Knowledge, and Uncertainty – Asymmetric and Private Information
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  L14- Industrial Organization – Market Structure, Firm Strategy, and Market Performance – Transactional Relationships; Contracts and Reputation; Networks
Abstract:
  Previous research suggests that loan officers play a critical role in relationship lending by producing soft information about SMEs. For the first time, we empirically confirm this hypothesis. We also examine whether the role of loan officers differs from small to large banks as predicted by Stein (2002). While we find that small banks produce more soft information, the capacity and manner in which loan officers produce soft information does not seem to differ between large and small banks. This suggests that, although large banks may produce more soft information, they likely tend to concentrate their resources on transactions lending.
Citations:   CitEc
 
15  Andrea Filippo Presbitero
Debt Relief Effectiveness and Institution Building [febbraio 2009]
Keywords:
  Debt Relief, HIPC, Institutions
JEL Classification:
  C33- Mathematical and Quantitative Methods – Multiple or Simultaneous Equation Models; Multiple Variables – Models with Panel Data; Longitudinal Data; Spatial Time Series
  F34- International Economics – International Finance – International Lending and Debt Problems
  H63- Public Economics – National Budget, Deficit, and Debt – Debt; Debt Management; Sovereign Debt
  O11- Economic Development, Technological Change, and Growth – Economic Development – Macroeconomic Analyses of Economic Development
Abstract:
  The history of debt relief is now particularly long, the associated costs are soaring and the outcomes are at least uncertain. This paper reviews and provides new evidence on the effects of recent debt relief programs on different macroeconomic indicators in developing countries, focusing on the Highly Indebted Poor Countries. Besides, the relationship between debt relief and institutional change is investigated to assess whether donors are moving towards and ex-post governance conditionality. Results show that debt relief is only weakly associated with subsequent improvements in economic performance but it is correlated with increasing domestic debt in HIPCs, undermining the positive achievements in reducing external debt service. Finally, there is evidence that donors are moving towards a more sensible allocation of debt forgiveness, rewarding countries with better policies and institutions.
Citations:   CitEc
 
14  Juan Carlos Martinez Oliva
Riunificazione intertedesca e politiche per la convergenza [gennaio 2009]
Citations:   CitEc
 
13  Andrea Filippo Presbitero, Alberto Zazzaro
Competition and Relationship Lending: Friends or Foes? [gennaio 2009]
Keywords:
  interbank competition, market organisational structure, relationship lending
JEL Classification:
  G21- Financial Economics – Financial Institutions and Services – Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  L11- Industrial Organization – Market Structure, Firm Strategy, and Market Performance – Production, Pricing, and Market Structure; Size Distribution of Firms
Abstract:
  Recent empirical findings by Elsas (2005) and Degryse and Ongena (2007) document a U-shaped effect of market concentration on relationship lending whichvcannot be easily accommodated to the investment and strategic theory of relationship lending. In this paper, we show that this non-monotonicity can be explained by looking at the organisational structure of local credit markets. We provide evidence that marginal increases in interbank competition are detrimental (favourable) to relationship lending in markets where transaction-based loans are a primary (limited) product offered by a vast (tiny) group of large, outside headquartered banks. On the contrary, where relational-based lending technologies are already widely in;use in the market, an increase in competition may drive banks to further cultivate their extensive ties with customers. Finally, we show that when competition comes from functionally distant banks, local intermediaries increase their engagement in relationship lending with local firms, consistent with the flight-to-captivity mechanism introduced by Boot and Thakor (2000) and further discussed by Dell’Ariccia and Marquez (2004) and Hauswald and Marquez (2006).
Citations:   CitEc
 
12  Francesco Nucci, Alberto Franco Pozzolo
Exchange Rate, Employment and Hours: What Firm-Level Data Say [gennaio 2009]
Keywords:
  Employment, Exchange rate, Firm’s foreign exposure
JEL Classification:
  E24- Macroeconomics and Monetary Economics – Macroeconomics: Consumption, Saving, Production, Employment, and Investment – Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
  F16- International Economics – Trade – Trade and Labor Market Interactions
  F31- International Economics – International Finance – Foreign Exchange
Abstract:
  Using a representative panel of manufacturing firms, we estimate the response of job and hours worked to currency swings, showing that it depends primarily on the firm’s exposure to foreign sales and its reliance on imported inputs. Further, we show that, for given international;orientation, the response to exchange rate ;fluctuations is magnified when firms exhibit a lower monopoly power and when they face foreign pressure in the domestic market through import penetration. The degree of substitutability between imported and other inputs and the distribution of workers by type introduce additional degrees of specilcity in the employment sensitivity;to exchange rate swings. Further, wage adjustments are also shown to provide a channel through which firms react to currency shocks. Finally, gross job ;ows within the firm are found to depend;on exchange rate fluctuations, although the effect on job creation is predominant.
Citations:   CitEc
 
11  Giovanni Ferri, Alberto Franco Pozzolo
Bank internationalization and trade: What comes first? [gennaio 2009]
Abstract:
  We study the dynamic nexus that changes in foreign bank penetration have with changes in trade and FDI between some selected OECD countries and Central and Eastern Europe countries (CEECs). Following the literature, we contemplate the possibility that such a nexus might differ depending on whether foreign bank entry materializes through the opening of branches or by acquiring local subsidiaries. The question that we try to answer is whether bank internationalization led or followed the increase in trade and manufacturing FDI. Using data on the changes in the bilateral linkages between OECD origin countries and CEECs target countries between 1995 and 2002, we find only one strong link, going from the share of bilateral trade over total trade from the country of origin, which we define a “push factor”, to the change in the presence of foreign branches. The link from trade to bank acquisition of foreign subsidiaries is instead much weaker. In addition, we find some evidence that the share of bilateral trade over total trade with the target country, which we define a “pull factor”, affects bank internationalization through the acquisition of subsidiaries, but not through the opening of branches.
Citations:   CitEc
 
10  Pietro Alessandrini, Andrea Filippo Presbitero
La Nuova Geografia Bancaria nel Mezzogiorno: la Necessità di un Approccio Sistemico [gennaio 2009]
Citations:   CitEc