Mariarosaria Agostino

Profits persistence and ownership: evidence from the Italian banking sector

The hypothesis that ownership structure affects persistence of profits in the Italian banking industry is tested. The time-invariant components of ROA and ROE are regressed against ownership concentration and the fraction of shares held by the major shareholders. The results show that abnormal profits increase if ownership is concentrated in foundations and banks, and decrease if market forces are allowed to operate.

The importance of being a capable supplier: Italian industrial firms in global value chains

This article argues that joining global value chains may be decisive for supplier firms in developed countries by providing incentives and opportunities to upgrade their capabilities to export and innovate. We describe an investigation conducted on a sample of Italian manufacturing firms, drawn from a database spanning 1998–2006 that compares labour productivity and total factor productivity between supplier and final firms at the same level of demonstrated ability (measured in terms of exporting and innovating). Findings indicate that ‘traditional’ supplier firms are less productive than final firms; as the ability of supplier firms increases, their productivity shortfall decreases to the extent that for those able to both export and innovate, there is no statistically significant difference in productivity between supplier and final firms.

International Accounting Standards and InformationEfficiency in the European Stock Market

We investigate the market valuation of accounting information in the European banking industry before and after the adoption of IFRS, the latest version of International Accounting Standards (IAS). Building on Ohlson (1995), we apply panel methods to a multiplicative interaction model in which the partial effects of earnings and book value on share prices are conditional on the adoption of IFRS. According to our evidence, the IFRS introduction enhanced the information content of both earnings and book value for more transparent banks. By contrast, less transparent entities did not experience significant increase in the value relevance of book value.

Collateral in lending relationships. A study on European SMEs microdata

Abstract This work empirically investigates the role played by collateralizable assets in helping SMEs to access bank credit, assuming that such a role might be affected by the (balancing between) benefits and costs related to enduring lending relationships. Using an exclusive data-set on European firms, we find that longer lending relationships amplify the beneficial effect of collateral on SMEs’ financing, suggesting that the advantages of longer bank-firm ties might prevail over the disadvantages. This finding holds for both more and less informationally transparent firms, as well as at the outset of the last financial crisis. Combined to the positive influence that the duration of bank relations seems to exert per se, our results provide (further) evidence in support of the valuable role of close lending relationships for SMEs’ financing.

Credit Rationing in Italy

This work presents new evidence on the determinants of credit rationing, seeking to discriminate between different theories by nesting them within a general empirical model. We consider determinants related to the demand for loans, the supply side, and institutional and environmental aspects affecting borrowers’ and banks’ behaviour in local credit markets. Another generalization of our approach is to consider both consumer and business credit constraints. Using direct measures of credit rationing provided by surveys carried out by the Bank of Italy and by Capitalia for the period 1995–2003, we estimate the impact of the main determinants of credit rationing in the Italian local credit markets. Our chief finding is that most of the regressors capturing the determinants from the demand side are significant and with the expected sign. By contrast, supply side determinants and local market conditions are not significant, save for the measure of banking competition and branch density.

World Bank Trade Adjustment Loans and Export Policy Distortions

Abstract This work investigates whether World Bank loans fostering trade liberalization are associated with less distorted export policies, by employing some gravity model‐based measures of anti‐export bias, and a Herfindhal index of export revenues concentration. When accounting for non‐random selection in a sample of 88 developing countries over the period 1980‐2000, the receipt of trade adjustment loans seems to have reduced the policy distortion under scrutiny. Such a beneficial influence, however, vanishes when a longer time horizon is considered, casting doubts on the country ownership of waves of liberalizations supported by the Bank.

Bank market power and firm creation: a multi-country analysis

Purpose – The purpose of this paper is to investigate the relationship between bank market power and firm creation, which represents a debated issue in the economic literature, still lacking empirical evidence. Design/methodology/approach – The analysis is carried out by taking an international perspective, using different measures of banking competition, and controlling for a large set of determinants suggested by the variegate literature on firms’ birth drivers. Findings – The main finding suggests that credit market competition may benefit firms’ creation, as the relationship between the latter and bank market power – when statistically significant – appears to be negative. In addition, the detrimental impact of market power appears greater (in absolute terms) when departing from higher levels of banking competition. Research limitations/implications – The empirical evidence seems supporting the competitive position in the debate on the role of banking competition. Furthermore, the authors reckon that ...

World Bank trade loans and export performance of recipient countries

Since 1980 several developing countries have received World Bank structural loans, aimed at opening their economy to international trade. By estimating a gravity equation on a panel of 180 countries, observed from 1962 to 2010, we investigate whether the Bank’s programs have affected the export performance of beneficiaries in the subsequent years. According to our results, trade loans have been ineffective in the shorter run while, in the longer, they appear to have hindered the export performance of recipient countries. The Bank’s new trade policy approach, however, seems to have some potential for inverting the negative influence that we have detected.

Trade Impact of European Union Preferences: The Role of Compliance Costs

We explore the effect of European Union (EU) non-reciprocal preferential schemes and the compliance costs they entail on the agricultural import flows from beneficiary countries. Since such costs are heterogeneous and mostly unobservable, we gauge their influence by some estimated proxies, and specify a gravity model that allows for a different preferential margin impact according to the costs level. For a large sample of developing countries in 2002, we find that the costs of compliance seem to play a role in making the schemes work: the lower the costs, the greater the impact of the preferential margins. Moreover, the margin effect seems different across different regimes.