Banks and Innovation: Microeconometric Evidence on Italian Firms

By L. Benfratello, F. Schiantarelli, A. Sembenelli. Social Science Research Network, 2008

568 citations recorded by the source corpus.

In this paper we investigate the effect of local banking development on firms' innovative activities, using a rich data set on innovation for a large number of Italian firms over the 1990's. There is evidence that banking development affects the probability of process innovation, particularly for small firms and for firms in high(er) tech sectors and in sectors more dependent upon external finance. The evidence for product innovation is weaker. There is also some evidence that banking development reduces the cash flow sensitivity of fixed investment spending, particularly for small firms, and that it increases the probability they will engage in R&D.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/45f710da2912786ec5a4a3f8baf61589802fa618

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Citations in the corpus

Does Internal Finance Matter for R&D? New Evidence from a Panel of Italian Firms (2008, methodology): “…releases of the survey have been used extensively in the literature (see Detragiache et al. 2000; Bagella et al., 2001; Angelini and Generale, 2005; Benfratello et al. 2006, Herrera and Minetti, 2007) 9 Industrial sectors are identified through the two-digit Ateco classification which is provided…”
Does Enforcement of Intellectual Property Rights Matter in China? Evidence from Financing and Investment Choices in the High-Tech Industry (2014, unknown): “…provincial variations is similar to that of Guiso, Sapienza and Zingales (2004) who study the difference in regional social capital in Italy, and Benfratello, Schiantarelli, and Sembenelli (2006) who investigate the effect of local banking development on firms’ innovative activities in Italy.”
The financing of small innovative firms: the Italian case (2009, unknown): “On the grounds of the classification used in other empirical papers (Benfratello et al. 2006; Carpenter and Petersen, 2002a), high-tech sectors are defined as the following: chemicals, nonelectrical machinery, office equipment and computers, electric machinery equipment, electronic material,…”
Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition (2011, background): “, Bernard and Jensen (1995), (1997)) and, by definition, exporters compete on world markets and are exposed to foreign competition.”
Does Banking Competition Affect Innovation (2015, background): “Benfratello, Schiantarelli, and Sembenelli (2008) show that local banking development increases the “process innovation” (but not necessarily the “product innovation”) of Italian manufacturing firms.”
Banking Deregulation and Innovation (2013, background): “…of interstate deregulation with the dummy for states where the share of small firms was low is consistently negative 12In a recent paper, Benfratello, Schiantarelli, and Sembenelli (2008) investigate the effect of local banking development on firms’ innovative activities using a rich…”
‘Better late than never’: the interplay between green technology and age for firm growth (2017, background): “The importance of banks in financing innovation (Benfratello et al. 2008) also plays a key role in the Italian context, and mature firms are more capable (e.g. by reputation) of developing borrowing relationships for their innovations (Gregory et al. 2005; Hartarska and Gonzalez-Vega 2006;…”
Competition and Relationship Lending: Friends or Foes? (2011, unknown): “…as the appropriate size of local credit markets is consistent with recent literature on the Italian banking system (Herrera and Minetti, 2007; Benfratello et al. , 2008; Alessandrini et al. , 2009b), given that, according to the Bank of Italy data, more than 90 percent of credit granted…”
Little innovation, many jobs. An econometric analysis of the Italian labour productivity crisis (2010, methodology): “The data were cleaned for extreme values by excluding observations falling into the highest and lowest 0.5 percentiles (working on the Capitalia survey, Benfratello et al., 2005 and Parisi et al., 2006 used a similar method).”