Alberto Zazzaro

• PhD
• Professor (Full) at University of Naples Federico II

In this work, we analyze the relation between environmental risks and firms’ investments, and whether this relationship is different for green firms. We merge balance sheet and patenting activity data on Italian firms in manufacturing sectors during the period 2010–2019 with information on environmental risk at the municipality level. We show that...

This paper combines administrative data from the Italian social security administration and proprietary data from a major Italian commercial bank to analyse the impact of job protection legislation on mortgage conditions. An exogenous change in the degree of job protection against individual dismissals of workers with open‐ended contracts is identi...

Using a survey of Italian households, we find that large income losses suffered during the first wave of the Covid-19 pandemic in 2020 are associated with a decline in trust towards political (i.e. Italian Central Government and the EU Parliament) and financial (i.e. ECB and Italian commercial banks) institutions in the management of the Covid-19....

We estimate the effect of financial inclusion on transition probabilities into/out of poverty. By exploiting a longitudinal sample of Italian households between 2002 and 2016, we find that financial inclusion is effective in both reducing the likelihood of entering poverty and helping the poor to climb out of it. According to our estimates, access...

Using firm-level survey information, we investigate whether relationship lending affects firms' employment decisions in the face of negative sales shock. We find that firms with a durable relationship with their main bank display significantly less employment growth sensitivity to such shocks, especially where these are transitory. The result is st...

This paper presents a theoretical model exploring the role of institutional distance between voters and politicians in the provision of public goods and citizens’ welfare. Proximity eases access to information about public policies, increasing political accountability. However, rent-seeking politicians can bias information reducing citizens’ welfar...

We examine possible reallocation effects generated by the COVID-19 outbreak by analyzing the patterns of venture capital (VC) investments around the globe. Using transaction-level data and exploiting the staggered nature of the spread of the virus, we document a shift in VC portfolios towards firms developing technologies relevant to an environment...

Using a new survey of Italian households, we study the effect of fear of COVID-19 contagion and income risk on consumption. The survey elicits individual-level indicators of fear of contagion, distinguishing between worries while working, shopping, traveling, eating out and meeting relatives or friends. We find that the probabilities of consumption...

This paper uses a variety of estimation methods to explore the empirical relationship between interest rate and collateral requirements in bank loan contracts. Methods that do not allow for endogenous contract terms detect a positive reciprocal association between interest rate and collateral. Methods that allow for endogenous contract terms point...

A large literature has developed on the distinction between hard and soft information with much of this literature focused on displacement of soft information with hard information. We investigate whether the propensity of loan officers at local branches to incorporate soft information in the credit scoring process is affected by the geographical d...

Economic sanctions usually fail, sometimes even provoking the opposite of the intended outcome. Why are sanctions so often ineffective? One prominent view is that sanctions generate popular support for the targeted government and its policies; an outcome referred to as the rally-around-the-flag effect. We quantify this effect in the context of a ma...

By using mid-corporate loan-level data on loan approval decisions collected from a large European bank, we investigate whether spatially-based bank organizational frictions affect borrowers’ credit availability.

This chapter relates the experience of the Money and Finance Research Group (MoFiR) established almost two decades ago within the Department of Economics of UNIVPM. The MoFiR main research focus has been the analysis of the evolution of the financial system on the development of economic systems. This chapter synthetizes some of the authors’ main c...

This study investigates the impact of public subsidies for research and development (R&D) on the debt financing of small and medium-sized enterprises (SMEs). It examines a public program implemented in the Marche region of Italy during the period 2005-2012. The study combines matching methods with a difference-indifference estimator to examine whet...

This paper examines how collateralization in small business lending varies with bank-borrower proximity. Our analysis establishes a robust inverse relationship between distance and collateral: Borrowers located in the vicinity of the bank face higher collateral requirements. The estimated relationship is independent of the allocation of decision-ma...

This paper explores the causes and the consequences of the evolution of family firms in the growth process. The theory suggests that in early stages of development, valuable family specific human capital stimulated the productivity of family firms and the development process. However, in light of the rise in the importance of managerial talents for...

This paper studies the impact of changes in immovable property tax revenues on the growth rate of house prices by analysing a panel of 34 OECD countries over the period 1970–2014. Starting from the annual series of immovable property tax revenues, we isolate years of significant shifts in the property tax regime and study their impact on house pric...

The aim of this paper is to investigate the role of family CEOs’ relational capital and non-family CEOs’ managerial skills in the context of bank relationships for a large sample of small- and medium-sized European firms. The results indicate that family firms appointing family managers are significantly more likely to maintain soft-information-bas...

This paper provides novel empirical evidence on the effectiveness of regional research and innovation policies for small and medium-sized enterprises (SMEs). It investigated two subsidy programs implemented at the regional level in central Italy. One program targeted SMEs’ investments in individual research projects, and the other focused on collab...

We widen the understanding of the finance-growth nexus by accounting for the indirect effect of financial development through input-output (IO) linkages in determining the growth of industries across countries. If financial development is expected to promote disproportionately more the growth of industrial sectors that are more in need of external...

In this paper, we analyse the relationship between risk and competition in the Italian banking sector over the period from 2006 to 2010. We employ OLS and panel estimators to estimate the impact of the Lerner index, a measure of bank market power, on the Altman Z-score, a proxy of the insolvency probability. Our results are consistent with the trad...

In this paper, we offer novel empirical evidence on the impact of natural disasters on remittance flows towards low- and middle-income countries. We consider a panel of 98 countries over the period 1990–2010. Our findings show that remittances increase after a disaster, thus contributing ex post to the reconstruction process. At the same time, we f...

Academic research recognizes that the organizational structure of banks could have implications for the financing of small businesses and entrepreneurial firms. In this chapter, we start by reviewing the underlying theoretical motivation and then summarize existing evidence. Overall, it is confirmed that the organization of lending institutions is...

This paper investigates whether firms’ access to credit is characterized by state dependence. We introduce a first-order Markov model of credit restriction with sample selection that makes it possible to identify state dependence in presence of unobserved heterogeneity. The results, based on a representative sample of Italian firms, show that state...

This paper looks at the effects of International Monetary Fund (IMF) lending programs on banking crises in a large sample of developing countries, over the period 1970-2010. The endogeneity of the IMF intervention is addressed by adopting an instrumental variable strategy and a propensity score matching estimator. Controlling for the standard deter...

The evolution of the banking industry has always been affected by recurrent waves of technological, regulatory and organizational changes. All such changes have significant effects on the spatial organization of banks, the interconnectedness of geographical credit markets and the core-periphery structure of banking industry. In this chapter, we re...

Abstract In this paper we empirically test the recent lender-based theory for the use of collateral in bank lending. Based on a proprietary dataset of loan contracts written by a local bank in competitive credit markets, we use the physical proximity between borrowers and the lending branch of the bank to capture its information advantage and the m...

In this paper we present a new theory accounting for the heterogeneous impact of family firms on economic growth. We develop an overlapping generations model, where agents are heterogeneous in innate talent, and family firms have access to an additional source of managerial capital, family connections, which affects the incentives of the firms' own...

We present a simple theory and an empirical test for state dependence in firm access to credit. We estimate a first-order Markov model of credit restriction with sample selection that makes it possible to estimate state dependence in the presence of feedback effects and observed and unob- served heterogeneity. The results, based on a representative...

In this paper we explore the effects of bank–borrower physical proximity on price and non-price aspects of small business lending in local credit markets. Along the price dimension, our analysis reveals that interest rates increase with bank–borrower distance and decrease with the distance between borrower and other competing banks. Along the quant...

The survival and competitiveness of the agricultural sector is increasingly threatened by the aging process of farmers and farms. In this perspective, the European Union has launched a number of initiatives directed towards favoring the entry of a new generation of young entrepreneurs in the agricultural sector. However, the way in which this trans...

The survival and competitiveness of the agricultural sector is increasingly threatened by the aging process of farmers and farms. In this perspective, the European Union has launched a number of initiatives directed towards favoring the entry of a new generation of young entrepreneurs in the agricultural sector. However, the way in which this trans...

Traditional banks have proved to have severe limits in mitigating financial exclusion. The microfinance revolution is intended to address this problem by devising new approaches which ease credit access for poor and uncollateralized borrowers. In this introductory essay we present a special issue of the Rivista Italiana degli Economisti on the role...

We estimate a behavioural model of household’s remittances to investigate to what extent the level of financial development in the home country affects decisions on whether and how much to remit.

A major policy issue is whether troubles in the banking system re ected in the bankruptcy of Lehman Brothers in September 2008 have spurred a credit crunch and, if so, how and why its severity has been different across markets and firms. In this paper, we tackle this issue by looking at the Italian case. We take advantage of a dataset on a large sa...

Recent empirical findings by and document a U-shaped effect of market concentration on relationship lending which cannot be easily accommodated by the investment and strategic theories of bank lending orientation. In this paper, we suggest that this non-monotonicity can be explained by looking at the organizational structure of local credit markets...

We estimate a remittance model in which we address endogeneity and reverse causality relationships between remittances, pre-transfer income and consumption. In order to take into account the fact that a large share of individuals do not remit, instrumental variable variants of the double-hurdle and Heckit selection models are proposed and estimated...

The literature on collusive cartels has mainly focused on the impact of antitrust fines on the sustainability of cartels, in infinitely repeated games. This approach, however, does not allow us to study the effect of antitrust fines on the incentives to form cartels in the first place. In this paper, we adopt a coalitional game approach to modeling...

In this chapter we review the academic literature on the role of loan officers in the loan origination process and lending relationships with small businesses. In particular, we focus on a recent stream of research which recognizes that loan officers – with their behavior, character and even emotions – are a key factor affecting the outcome of bank...

In this paper we study the relevance of the gender of the contracting parties involved in lending. We show that female entrepreneurs face tighter credit availability, even though they do not pay higher interest rates. The effect is independent of the information available about the borrower and holds if we control for unobservable individual effect...

In the wake of the global crisis the International Monetary Fund (IMF) increased its exposure to low-and middle-income countries and boosted the overhaul of its lending approach to enhance its role in preventing crises. This paper tests whether IMF lending has targeted countries most affected by the crisis in order to dampen contagion effects and a...

In this paper we study the relevance of the gender of the contracting parties involved in lending. We show that female entrepreneurs face tighter credit availability, even though they do not pay higher interest rates. The effect is independent of the information available about the borrower and holds if we control for unobservable individual effect...

Developing countries are the least to blame for the outbreak of the nancial crisis, but they are destined to suer the most dramatic and long-lasting consequences. This chapter focuses on the early responses of the International Monetary Fund to the present crisis in low- and middle-income countries. The IMF lending policy has been harshly criticize...

It is widely recognized that regional policies implemented in Southern Italy in the last 15 years have had poor effects in terms of Gdp, employment and firms' performance. This chapter seeks to put forth possible explanations of this unfortunate outcome and to predict the likely impact of the current global crisis and the impending fiscal federalis...

A puzzling but consistent result in the empirical literature on banking is that firms with close bank ties do not grow faster than bank-independent firms. In this paper, we reconsider the link between relationship lending and firms’ growth, distinguishing firms by size and “health”. The idea is that the beneficial effects of relationship lending on...

In the early 1990s, a widely shared opinion among scholars and practitioners was that the importance of physical proximity between banks and borrowers would be doomed to decrease drastically over time and, put in extreme terms, the end of banking geography would become a real possibility. However, the empirical evidence shows the continued importan...

Technological progress, deregulation, and consolidation have deeply changed the geography of the banking industry in many countries. In particular, two contrasting trends have emerged from the intense integration and consolidation process that have swept the European and US banking industry in the 1990s: the geographical diffusion of banking struct...

Bank deregulation and progress in information technology altered the geographical diffusion of banking structures and instruments, and reduced operational distance between banks and local economies. Although, the consolidation of the banking industry promoted the geographical concentration of banking decision-making centres and increased functional...

The paper studies the role of gender in the process of small business lending. Using a unique dataset that employs detailed contract information from more than 7,800 credit lines made to small businesses by a major Italian bank, we show that female borrowers are not disadvantaged vis-a-vis their male counterparts with respect to the price of credit...

Few scholars have seriously considered the possibility that the very existence of an antitrust law might make markets less competitive. In this chapter, we provide a selective review of this thought-provoking literature. The focus of our analysis is on contributions within the limits of the neo-classical theory of firms and markets, pointing out th...

A well-established result of the theory of antitrust policy is that it might be optimal to tolerate some degree of collusion among firms if the authority in charge is constrained by limited resources and imperfect information. However, few doubts are cast on the common opinion by which stricter enforcement of antitrust laws definitely makes market...

Recent empirical findings by Elsas (2005) and Degryse and Ongena (2007) document a U-shaped effect of market concentration on relationship lending whichvcannot be easily accommodated to the investment and strategic theory of relationship lending. In this paper, we show that this non-monotonicity can be explained by looking at the organisational str...

In this chapter we analyse the new geography of the Italian banking system on the basis of the integration pressures of recent years. The analysis of the evolution of the banking system is focused on the concept of distance. In particular, we not only refer to the traditional distance between bank and customers, that is the operational distance, bu...

In this paper we study the relevance of the gender of the contracting parties involved in lending. We show that female entrepreneurs face tighter credit availability, even though they do not pay higher interest rates. The effect is independent of the information available about the borrower and holds if we control for unobservable individual effect...

Two contrasting trends have emerged from the intense integration and consolidation process that have swept the European and U.S. banking industry in the 1990s: the geographical diffusion of banking structures and instruments and the geographical concentration of banking power in a few financial centers within each country. The first trend has contr...

For many countries, remittance behaviour by migrants is an important component of their overall international financial flows. To date, the empirical literature has analysed the propensity to remit as a function of migrants' socio-economic characteristics. However, no studies have fully addressed the empirical implications of remittance behaviour b...

Does participation in inter-firm networks make access to credit easier for firms? Is finance a motivation driving the formation of inter-firm networks? During the last twenty years these two questions have been hotly debated by economists both theoretically and empirically. In this paper, we selectively review the literature on inter-firm networkin...

In many countries, Mutual Loan-Guarantee Societies (MLGSs) are assuming ever-increasing importance for small business lending. In this paper we provide a theory to rationalise the raison d'^etre of MLGSs. The basic intuition is that the foundation for MLGSs lies in the inefficiencies created by adverse selection, when borrowers do not have enough c...

In a recent study, Chami et al. (2003) suggested that remittances can have a negative impact on;economic growth of the receiving country by diminishing the work effort of the migrants' relatives.;Subsequently, Giuliano and Ruiz-Arranz (2009) found that this moral hazard effect emerges only;when financial development is low. In this paper, we introd...

The theoretical literature had identified potential benefits and costs of close bank-firm relationships for both parties, suggesting possible reasons for firms being vaptured by banks and vice versa. In this paper we empirically explore the effects of long-lasting credit relationships on employment and asset growth of a large sample of Italian manu...

The empirical literature is largely supportive of the importance of financial constraints and identifies local banking development and relationship lending as possible determinants of firms’ propensity to innovate. In this chapter, we argue that the spatial organization of banking systems and the distance of local branches from banks’ decisional ce...

A well-established result of the theory of antitrust policy is that it might be optimal to tolerate some degree of collusion among firms if the Authority in charge is constrained by limited resources and imperfect information. However, few doubts are cast on the common opinion by which stricter enforcement of antitrust laws definitely makes market...

One of the most lively-debated effects of banking acquisitions is the change in lending and asset allocation of the target bank in favour of transaction-based products, at the expense of small and informationally opaque borrowers. These changes may be the result of two distinct restructuring strategies pursued by the acquirer with respect to the as...

In this paper we investigate the relationship between product market competition and managerial incentives within a circular city model with observable agency contracts. With respect to the case of unobservability studied by Raith (2003 ), we find that optimal managerial contracts provide lower incentives, and that equilibrium expected prices and p...

Given the changes that occurred in the organization and specialization of Italian industrial districts and the changing geography of the banking system, in this paper is we aim at reassessing the bank-firm relationship in industrial districts. Using firm-level data on a sample of Italian SME, we examine the determinants of credit rationing and rela...

In the early 1990s, a widely-shared opinion among scholars and practitioners was that the importance of physical proximity between banks and borrowers would be doomed to drastically decrease over time and, put in extreme terms, the end of banking geography would become a real possibility. However, the empirical evidence show an unrelenting importan...

A growing body of research focuses on banking organizational issues, emphasizing the culties encountered by hierarchically organized banks in lending to borrowers/projects with high intensity of soft information. However, as the two extreme cases of hierarchical and non-hierarchical organizations are typically contrasted, what actually shapes the d...

One of the oldest and most awkward conundrums of monetary theory concerns the realization and accumulation of profit in money terms for the aggregate of firms. This paper aims to show that an analysis based on a weak concept of equilibrium as ‘order’, capable of accounting for business failure as a vital macroeconomic phenomenon, can lead to the so...