Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320004 
Year of Publication: 
2019
Series/Report no.: 
CASMEF Working Paper Series No. WP 2019/02
Publisher: 
LUISS Guido Carli, Department of Economics and Finance, Arcelli Centre for Monetary and Financial Studies, Rome
Abstract: 
The re-regulation wave following the global financial crisis is putting pressure on local community and cooperative banks. In this paper, we show that cooperative banking can play a pivotal role in reducing income inequalities in local communities. By analyzing Italian local (provincial) credit markets over the 2001-2011 period, we find that cooperative banks mitigate income inequality more than their commercial counterparts. This effect remains significant when we account for the pervasiveness of relationship lending in the provinces, suggesting that it is the specific nature and orientation of cooperative banks, rather than their lending technologies, that improve income distribution. The impact of cooperative banking on inequality appears to be mainly channeled by reduced migratory flows and lower business turnover.
Subjects: 
Cooperative banking
income inequality
financial development
JEL: 
G21
G38
O15
Document Type: 
Working Paper

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