The determinants of firm–bank relationships in Italy: bank ownership type,diversification and multiple banking relationships

This paper investigates the main features of the relationships between banks and non-financial firms in Italy. Based on detailed firm-level data, we analyse the role of firm-level characteristics, decision-making factors and local credit market indicators in shaping various aspects of corporate banking choices. Empirical results show that young and small firms have a higher probability of relationships with local banks, confirming the advantage of local credit institutions in dealing with informationally opaque firms. Large and internationally active firms tend to establish relationships with national and foreign banks, as they are able to provide more complex banking services that are crucial to access foreign markets. Moreover, firms that are more dependent on external financing are more likely to use multiple and differentiated banking relationships, as a way to diversify external financing sources and alleviate credit constraints.     

Konjunkturschlaglicht: Mehr Steuereinnahmen

HWWA-FORUM

Konjunkturschlaglicht: Mehr Steuereinnahmen     

Die Notwendigkeit der Einwohnerwertung

German equalisation systems among states (Länder) and among communities assign higher expenditure needs to larger cities. For the system among the states (Länderfinanzausgleich), in which the three city-states are assigned a value of 135 compared to a value of 100 for the other states, this element is challenged in a pending case before the constitutional court. The paper argues that the city-states should be treated like any large city in Germany, which would result in their being assigned a value well above 135. The main justification for the higher value for larger cities is seen in the crucial role of modern agglomerations for national economic growth. To maintain this role, they have to be able to keep or receive enough public finances, given that they contribute to upper-level finances way above the average but receive relatively little through those levels’ spending. The progressive scale smoothes at least some of this effect.     

Wirtschaftliche Zwä;nge für offene Volkswirtschaften

Summary Economic Restraints for Open Economies. - In an open economy, the usual budget restraint of equating expenditures and income is softened but the balance-of-payments restraint has powerful implications for allocation and national stabilization policies. These implications are studied. On the trade side, the restraint shows itself in the dependence on imports, in the necessity of exporting, in the opportunity costs of institutional settings as well as taxation in terms of foregone competitiveness and in interest and debt payment in the case of borrowing. From a stabilization point of view, the problem is analyzed to what extent an open economy can make itself more independent from international developments by exchange rate policy and by national institutional arrangements with respect to monetary, fiscal and incomes policy.

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Resumen Restricciones económicas para economías abiertas. - En una economía abierta la ecuación tradicional que iguala el gasto al ingreso se relaja pero la restrictión del balance de pagos tiene importantes implicaciones para la asignación de recursos y para políticas de estabilización. Se estudian estas implicaciones. En el ámbito del comercio exterior, la restricción influye sobre la dependencia de las importaciones, la necesidad de exportar, los costos de oportunidad de marcos institucionales, los impuestos en términos de competitividad perdida y los pagos de intereses y deuda en caso de endeudamiento. Desde el punto de vista de la estabilización se analiza en qué medida una economía abierta puede llegar a ser más independiente de los mercados internacionales con ayuda de la política cambiaria y de ajustes institutionales que afecten a las polítícas monetaria, fiscal y de ingresos.

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Résumé Contraintes économiques pour des économies ouvertes. - Dans une économie ouverte, l’ordinaire contrainte budgétaire d’équilibrer les dépenses et les recettes est affaiblie mais la contrainte de la balance des paiements a des implications importantes pour l’allocation et les politiques nationales de stabilisation. L’auteur étudie ces implications. Concernant le commerce extérieur la contrainte se révèle dans la dépendance des importations, dans la nécessité d’exporter, dans les co?ts d’opportunité des cadres institutionnels aussi bien que dans la taxation en terme de la compétitivité perdue et des paiements d’intérêt et de dette en cas d’endettement. Concernant la stabilisation, l’auteur analyse dans quelle mesure une économie ouverte peut se faire indépendante des développements internationaux à l’aide de la politique des taux de change et des arrangements nationaux institutionnels concernant la politique monétaire, fiscale et de revenu.

     

FOCUS: Business Ethics in Europe Current Developments in German Business Ethics

Germany is at the leading edge of European reflection on the nature and requirements of ethical business. Two scholars in the field provide a survey of the main lines of discussion in the current German business ethics scene, and discuss three important books which are helping set the scene for further developments. Prof. Dr. Horst Steinmann holds the Chair for Business Administration and Management at the University of Erlangen-Nürnberg, Lange Gasse 20, D-90403 Nürnberg, and Dipl.-Hdl. Brigitte Kustermann is research assistant to the same chair.