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Cooperative banks and income inequality: Evidence from Italian provinces

Author

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  • Pierluigi Murro

    (LUISS University)

  • Valentina Peruzzi

    (University of Trento and MoFiR, Italy)

Abstract
The aim of this paper is to investigate whether different credit institutions, and in particular cooperative banks, have a different impact on the reduction of income inequalities. By analyzing Italian local credit markets, i.e. Italian provinces, over the period 2001-2011, we find that cooperative banks’ diffusion significantly reduces income inequality. This finding is robust to different measures of income inequality, different proxies of local banking structure (cooperative banks branches, popular banks branches, commercial banks branches), and different estimation techniques. When we study the channel of influence, we find that the diffusion of cooperative banks is particularly relevant for income distribution where loans to families and firms are larger, bank-firm relationships are tighter and the number of new firms over incumbent is larger.

Suggested Citation

  • Pierluigi Murro & Valentina Peruzzi, 2018. "Cooperative banks and income inequality: Evidence from Italian provinces," Working Papers 481, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2018-481
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2018-481.pdf
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    More about this item

    Keywords

    Cooperative banks; income inequality; financial development.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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