Stefania Cosci

The Italian Financial System: neither Bank Based nor Market BasedManuscript received 21.10.96; final version received 9.12.97.

New data on the sources of finance for the nonfinancial corporate sector show that Italian firms as a whole use more equity finance than their Anglo-Saxon counterparts, and smaller Italian firms use equity more intensively than larger firms. Both findings can be understood in terms of the structure of industry and banking in Italy and the relations between them. Firm managers have considerable autonomy vis-a-vis both financial markets and intermediaries, and the Italian financial system should be seen as substantially different from either the high internal finance systems of the United States and the United Kingdom or the bank-based system of Japan. Copyright 1999 by Blackwell Publishers Ltd and The Victoria University of Manchester

Informal Central Bank Independence: An Analysis for Three European Countries

Changes in formal and informal central bank independence (CBI) in France, Italy and the UK in the period from the mid-1970s to the 1990s are examined; the major changes occurred in the 1990s, after the disinflations of the 1980s. Broad trends in the informal independence of central banks, defined as the ability to pursue price stability regardless of the government’s preferences, are identified on the basis of a monetary policy narrative and an analysis of a set of qualitative determinants of informal independence. The most important determinants are the social/political acceptance that monetary policy is the sphere of the central bank, the existence of antiinflationary commitments in the form of intermediate targets for monetary policy, the degree of social consensus on the means and ends of macroeconomic policy, and the relative technical expertise of the central bank. These broad trends help to explain some of the inflation experience of the 1980s and 1990s which cannot be understood in terms of changes to formal CBI.

Multiple Banking Relationships and Over-Leverage in Italian Manufacturing Firms

The purpose of this paper is to shed more light on the determinants of the number of bank lending relationships. In particular we look at the link between over-leverage and the number of banking relationships for a sample of Italian manufacturing firms, distinguishing between firms with a main bank and firms without a main bank. The main result of the paper is that the number of banking relationships increases with over-leverage only for firms without a main bank. We argue that this result is consistent with the view that, when banks perform transaction lending, firms can increase their debt capacity by increasing the number of creditors, promising ex ante up to the full amount of available assets to each one of the creditors.

A spatial analysis of growth and convergence in Italian provinces: the role of road infrastructure

ABSTRACT A spatial analysis of growth and convergence in Italian provinces: the role of road infrastructure. Regional Studies. The role of road infrastructure in reducing economic disparities is debated in both Europe and the United States. During the 1960s, huge investments in highways significantly reduced the time run between north and south Italy. A spatial analysis of convergence is performed. Results show that the effect of road infrastructure investment was significant but accompanied by a strong polarization between north and south (also emerging from non-parametric analysis) that it failed to prevent, possibly because investment in the south was not large enough to close the accessibility gap with the centre–north, a gap that appears to persist during the subsequent years.