Cost reducing investments and spatial competition

In this paper we analyze the relationship between competition and cost reducing investments in the context of a location model. In particular, we derive the symmetric subgame-perfect equilibrium of a three-stage circular city model with closed-loop strategies, and study the effects of changes in competition fundamentals under both a given number of firms and free entryCost reducing investments

Long-Lasting Bank Relationships and Growth of Firms

A puzzling but consistent result in the empirical literature on banking is that firms with close bank ties do not grow faster than bank-independent firms. In this paper, we reconsider the link between relationship lending and firms’ growth, distinguishing firms by size and “health”. The idea is that the beneficial effects of relationship lending on information asymmetries can be compensated by other negative capture, risk and externality effects which make relational banks reluctant to support long-term growth projects of client firms, and that the strength of these compensating effects varies with firm size and health status. We explore the influence of long-lasting bank relationships on employment and asset growth of a large sample of Italian firms. The main finding is that relationship lending hampers the efforts of small firms to increase their size, while it mitigates the negative growth of troubled, medium-large enterprises.relationship lending, capture effects, firms’ growth

How Does the EU Agenda Influence Economies outside the EU? The Case of Tunisia

Economic and commercial relations between the countries of the southern Mediterranean and the European Union (EU) have been profoundly affected by the recent ‘EU Initiative for the Mediterranean’ and conditioned by the creation of European Monetary Union (EMU). The paper discusses the costs, benefits and prospects of these two processes in terms of their economic consequences on the countries of the southern Mediterranean, and in particular on the Tunisian economy. The association agreement between the EU and Tunisia is assessed in the light of its medium-period implications and of the EU’s enlargement to include the countries of Eastern Europe. With regard to EMU, the paper discusses the influence and effects exerted by introduction of the euro on the Tunisian economy.

IMF Lending in Low- and Middle-Income Countries in the Wake of the Global Crisis

In the wake of the global crisis the International Monetary Fund (IMF) increased its exposure to low- and middle-income countries and boosted the overhaul of its lending approach to enhance its role in preventing crises. This paper tests whether IMF lending has targeted countries most affected by the crisis in order to dampen contagion effects and assesses to what extent the Fund\'s strategy has been driven by political-economy interests of its major shareholders. Results show that political similarity between borrowers and G7 governments has influenced the participation in IMF pro-grams, especially where the crisis was severe. In addition, the extent of the crisis and the economic interest of Western countries have affected the size of the loan.Global crisis, IMF programs, Washington Consensus, growth

Competition and Relationship Lending: Friends or Foes?

Recent empirical findings by Elsas (2005) and Degryse and Ongena (2007) document a U-shaped effect of market concentration on relationship lending which cannot be easily accommodated by the investment and strategic theories of relationship lending. In this paper, we suggest that this non-monotonicity can be explained by looking at the organizational structure of local credit markets. We provide evidence that marginal increases in interbank competition are detrimental to relationship lending in markets where large and out-of-market banks are predominant. On the contrary, where relational-based lending technologies are al-ready widely in use in the market by a large group of small mutual banks, an increase in competition may drive banks to further cultivate their extensive ties with customers.interbank competition, market organizational structure, relationship lending

Banks' inefficiency and economic growth: a micro-macro approach

This paper offers a methodological contribution to empirical analysis of the relationships between banking and economic growth by proposing the microeconomic efficiency of banks as a new proxy for the state of development of the banking system. This measure is partly able to overcome the problem of causality and to capture the allocative function of banks.This methodology is then applied to the banking system and economic growth in the Italian regions, using a dynamic panel approach. The econometric results show the existence of an independent effect exerted by banking efficiency on real growth and the importance of the allocative function of banks.Bank efficiency; regional growth

Income, consumption and remittances: Evidence from immigrants to Australia

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. --Double-hurdle model,migration,remittances

La scomparsa dei centri decisionali dal sistema bancario meridionale

More than a decade has now gone by since the crises of Banco di Napoli, Banco di Sicilia, Sicilcassa and the majors southern “Casse di Risparmio” have actually decreed the vanishing of an independent banking system in southern regions, but the economic and political debate on the effects of this process is still lively. In this paper, I introduce the main themes debated during the last ten years by researchers, practitioners and politicians. Specifically, I present the theoretical and practical reasons of those who consider the present structure of the southern banking system unsatisfactory for the economic prospects of the area.

Banks´ Inefficiency and Economic Growth A Micro-Macro Approach

This paper offers a methodological contribution to the empirical analysis of the relationships between banking and economic growth by suggesting a new indicator for the state of development of the banking system based on a measure of bank microeconomic efficiency. This choice helps to overcome the problem of causality and to capture the effects of the banks’ allocative activity. This new approach is then applied to analyse the relationship between the banking system and economic growth in the Italian regions, through a dynamic panel technique. The empirical results show the existence of an independent effect exerted by the efficiency of banks on regional growth.Bank efficiency, regional growth

Risk and Competitiveness in the Italian Banking Sector

In this paper, we analyse the relationship between risk and competition in the Italian banking sector over the period from 2006 to 2010. We employ OLS and panel estimators to estimate the impact of the Lerner index, a measure of bank market power, on the Altman Z-score, a proxy of the insolvency probability. Our results are consistent with the traditional charter value paradigm and reject the new risk-shifting paradigm proposed by Boyd-De Nicolò (2005). We find that the relationship between bank risk and competition becomes more tightening during the financial crisis. Our results are robust to different definitions of crisis and different specifications