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- 2023-12-20 (2)
- 2021-12-31 (1)
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Abstract
This paper analyzes whether the regional distribution of new firms is shaped by market concentration of the local banking industry. The case of Italy is considered, where important mergers and acquisitions between banks have been carried out recently. The empirical analysis is based on provincial data (NUTS-3 level) in the period 2011-2019. The results indicate that bank concentration and firm creation have an inverted U-shaped relationship: bank concentration fosters firm creation in those provinces characterized by low levels of concentration, while it reduces new firm creation in the provinces with high concentration. Overall, these findings suggest that concentration of the local banking industry affects the regional distribution of new firms and can increase regional economic disparities.
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