Urban Agglomerations and Firm Access to Credit

38 Pages Posted: 10 Aug 2019

Date Written: June 18, 2019

Abstract

The paper investigates whether firms have better access to bank credit in areas with a larger degree of urbanization. It uses bank-firm data drawn from the Credit Register maintained at the Bank of Italy to devise an indicator of ease of access to credit. The paper proposes an instrumental variable strategy that uses as instruments past population density and urbanization driven by considerations of political economy. The results show that urbanization affects access to credit positively for construction firms, whose collateral greatly benefits from thicker real estate markets. No impact is found for service and manufacturing firms.

Keywords: surbanization, access to credit

JEL Classification: G21, R11, R51

Suggested Citation

Carmignani, Amanda and de Blasio, Guido and Demma, Cristina and D'Ignazio, Alessio, Urban Agglomerations and Firm Access to Credit (June 18, 2019). Bank of Italy Temi di Discussione (Working Paper) No. 1222, June 2019, Available at SSRN: https://ssrn.com/abstract=3435106 or http://dx.doi.org/10.2139/ssrn.3435106

Amanda Carmignani

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Guido De Blasio

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Cristina Demma (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alessio D'Ignazio

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
14
Abstract Views
219
PlumX Metrics