Di.S.E.S. working papers

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Last 10 papers


Paper nr. 184

Title: AUTHORITY, INFORMATION, AND CREDIT TERMS: EVIDENCE FROM SMALL BUSINESS LENDING
Authors: Andrea Bellucci, Alexander Borisov, Alberto Zazzaro
Month/Year: December 2023
JEL codes: D83, D21, G21, G30, L11
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/184.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir184.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:184&o=all
Abstract:
This paper studies the interplay between allocation of decision-making authority and information production within a bank in the context of small business lending. Using a sample of credit lines to small businesses and changes in the overlap between decision-making authority and information production following an organizational restructuring of the bank, we show that an increase in the authority of the information-producing loan officer leads to a reduction in the use of collateral but leaves interest rates broadly unchanged. The reduction of collateral requirements is more pronounced when loan officers have tacit local knowledge or soft information or when their real authority is limited pre-restructuring. Our results highlight the effect of alignment of information production and decision-making authority on the contract terms of bank credit.

Paper nr. 183

Title: A TURNING POINT FOR BANKING: UNRAVELLING THE CHANGING LANDSCAPE OF BANKING ACTIVITY IN EUROPE SINCE THE COVID-19 PANDEMIC
Authors: Andera Bellucci, Gianluca Gucciardi
Month/Year: December 2023
JEL codes: G21, G22, G23, G24, F3
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/183.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir183.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:183&o=all
Abstract:
This study investigates the impact of the COVID-19 pandemic on the European banking system, focusing on lending activities and risk-taking behavior. We use a difference-in-differences (DID) approach to compare the performance of banks highly impacted by the pandemic with those operating in less affected countries. Our results indicate a negative impact on lending activities, as banks reduced their exposure to both individuals and businesses. Nonetheless, the impact on banks? risk-taking was heterogeneous, as certain banks increased their risks taking by relaxing their lending standards in order to support their borrowers, while others adopted stricter lending criteria. The reduction in total lending observed for the entire banking system is primarily driven by less capitalized banks and those with limited access to public guarantees schemes. Different characteristics, such as size, profitability, and listing status, led to varied lending behaviors during the COVID-19 pandemic, with smaller and more profitable banks exhibiting greater resilience. In summary, our findings suggest that the COVID-19 pandemic has significantly impacted the European banking system, resulting in decreased lending activities and a varied effect on risk.

Paper nr. 182

Title: THE INTERNATIONALIZATION OF CHINA'S EQUITY MARKETS
Authors: Juan J. Cortina, Maria Soledad Martinez Peria, Sergio L. Schmukler, Jasmine Xiao
Month/Year: July 2023
JEL codes: F33; G00; G01; G15; G21; G23; G31
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/182.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir182.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:182&o=all
Abstract:
The internationalization of China's equity markets started in the early 2000s but accelerated after 2012, when Chinese firms' shares listed in Shanghai and Shenzhen gradually became available to international investors. This paper documents the effects of the post-2012 internationalization events by comparing the evolution of equity financing and investment activities for (i) domestic listed firms relative to firms that already had access to international investors and (ii) domestic listed firms that were directly connected to international markets relative to those that were not. The paper shows significant increases in financial and investment activities for domestic listed firms and connected firms, with sizable aggregate effects. The evidence also suggests that the rise in firms' equity issuances was primarily and initially financed by domestic investors. Foreign ownership of Chinese firms increased once the locally issued shares became part of the Morgan Stanley Capital International (MSCI) Emerging Markets Index in 2018.

Paper nr. 181

Title: BILATERAL INTERNATIONAL INVESTMENTS:THE BIG SUR?
Authors: Fernando Broner, Tatiana Didier, Sergio L. Schmukler, Goetz von Peter
Month/Year: July 2023
JEL codes: F21, F36, G15
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/181.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir181.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:181&o=all
Abstract:
This paper presents novel stylized facts about the rise of the South in global finance using country-tocountry data. To do so, the paper assembles comprehensive bilateral data on cross-border bank loans and deposits, portfolio investment, foreign direct investment, and international reserves from 2001 to 2018. The main findings are that investments involving the South, and especially within the South, have grown faster than those within the North. By 2018, South-to-South investments accounted for 8% of total international investments, while investments between the South and the North accounted for an additional 26%. The fastest growth occurred in portfolio investment and international reserves, whereas the slowest growth was in banking. These trends are not driven by China, any particular South region, or offshore financial centers. South-to-South investments grew the fastest even after controlling for regional GDP growth. The extensive margin played a significant role in the growth of investments within the South.

Paper nr. 180

Title: DISCRIMINATION OF IMMIGRANTS IN MORTGAGE PRICING AND APPROVAL: EVIDENCE FROM ITALY
Authors: Paolo Emilio Mistrulli, Md Taslim Uddin, Alberto Zazzaro
Month/Year: May 2023
JEL codes: G21, J15, J71
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/180.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir180.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:180&o=all
Abstract:
In this paper, we explore empirically whether immigrants, other things being equal, pay more for mortgages than natives and whether the probability that banks approve their loan applications is systematically lower. To this aim, we use two extensive and unique dataset of mortgage contracts and banks' requests for initial information about potential mortgagors drawn from the Italian Credit Register for the period 2011-2016, and survey data from the Survey on Household Income and Wealth conducted by the Bank of Italy for the period 2006-2016. We find that immigrants pay 20-24 basis points more than native Italians on single-name mortgages and 28-40 basis points more on jointly-owned ones. This interest rate gap narrows significantly, but does not disappear, when immigrant borrowers' credit history lengthens or if they borrow from a cooperative bank. Finally we find that immigrants have a 2.7% smaller chance of getting a mortgage compared to natives, which decreases for mortgage applications submitted to cooperative banks. Overall, our findings suggest that the disparity of treatment of immigrants in the Italian mortgage market is mostly due to a greater difficulty of banks in assessing the credit-worthiness of culturally distant borrowers. However, we also detect that cultural distance may fuel persistent disparity between migrants and natives.

Paper nr. 179

Title: HOW DO MONTHLY REMITTANCES RESPOND TO NATURAL DISASTERS IN MIGRANTS' HOME COUNTRIES?
Authors: Giulia Bettin, Amadou Jallow, Alberto Zazzaro
Month/Year: April 2023
JEL codes: F24, F22, Q54
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/179.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir179.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:179&o=all
Abstract:
The literature on the impact of natural disasters on remittances has provided mixed evidence so far, with identification remaining a key challenge. This paper studies the insurance role of remittances by investigating their dynamic response in the aftermath of a disaster. We use a novel and rich panel dataset of monthly remittance flows from Italy to 81 developing countries for the period 2005 to 2015. We find that monthly remittance flows on average increase by 2% due to natural disasters in migrants' home countries. The response gets significant a few months after the event and tends to disappear within a year from the disaster occurrence. The intensity and timing of remittances' responsiveness are heterogeneous according to the nature of the disaster, the receiving country's characteristics, and migrants' socio-economic conditions in the host country.

Paper nr. 178

Title: BANK DIVERSITY AND FINANCIAL CONTAGION
Authors: Emmanuel Caiazzo, Alberto Zazzaro
Month/Year: February 2023
JEL codes: G01, G21, G28
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/178.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir178.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:178&o=all
Abstract:
This paper analyzes financial contagion in a banking system where banks are linked by interbank claims and common assets. We find that asset commonality makes banking systems more vulnerable to idiosyncratic shocks and helps to determine which interbank network structures are resistant to contagion. When the degree of commonality is homogeneous across banks, the most resilient structure is the complete interbank network in which each bank borrows evenly from all the others. However, when the bank most exposed to the defaulting bank is not the one whose portfolio is most similar to it, incomplete interbank networks are more resilient than complete. We also show that the degree and variability of asset commonality between banks and the way this intertwines with the cross-holdings of interbank deposits have important implications for macroprudential regulation.

Paper nr. 177

Title: INFORMATION ASYMMETRY, EXTERNAL CERTIFICATION, AND THE COST OF BANK DEBT
Authors: Andrea Bellucci, Alexander Borisov, Germana Giombini, Alberto Zazzaro
Month/Year: November 2022
JEL codes: D83, D21, G21, G30, L11
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/177.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir177.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:177&o=all
Abstract:
This paper examines how the cost of bank debt reflects public information about borrower quality, and whether such information complements or substitutes the private information of banks. Using a sample of small business loans, and the award of a competitive public subsidy as an observable positive signal of external certification, we find that a certification is associated with a lower cost of debt for the recipients if the amount of private information of the lender is low. As the bank accumulates more information over the course of the lending relationship with a borrower, public information loses importance and no longer has a significant effect. Our results highlight a potential positive effect of external certification, and suggest that public and private information can be substitutes in the pricing of bank debt.

Paper nr. 176

Title: MONETIZATION, WARS, AND THE ITALIAN FISCAL MULTIPLIER
Authors: Michele Fratianni, Federico Giri, Riccardo Lucchetti, Francesco Valentini
Month/Year: July 2022
JEL codes: E32; E58; E62; N13; N14
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/176.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir176.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:176&o=all
Abstract:
This paper investigates the size of Italian fiscal multipliers under different business-cycle phases over the period 2006. Using pre-WWII public defense expenditures as an instrument of total expenditures, we quantify the magnitude1872 of the fiscal multiplier. Controlling for the business cycle phase, the multiplier is higher in recessions than in expansions. Furthermore, the multiplier is higher with the joint occurrence of monetization and slackness. Monetization alone does not exert a significant impact on the multiplier. Our results are confirmed using a timevarying parameter methodology that captures the country's structural changes over a long stretch of time.

Paper nr. 175

Title: GENDER GAP IN BUSINESS ANGEL FINANCING
Authors: Andrea Bellucci, Gianluca Gucciardi, Rossella Locatelli, Cristiana Schena
Month/Year: June 2022
IDEAS/RePEc url: https://ideas.repec.org/p/anc/wmofir/175.html
Download: http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir175.pdf
Citations: http://citec.repec.org/cgi-bin/get_data.pl?h=RePEc:anc:wmofir:175&o=all
Abstract:
We study the relevance of the gender of contracting parties involved in equity early-stage financing using transaction-level data on Business Angel (BA) investments around the world between 2018 and 2020. In particular, we analyze whether the gender of BA investor has an impact on the size of the financial transaction and whether female-owned businesses are disadvantaged with respect to male-owned businesses. Then, we offer insights into possible channels and underlying mechanisms that could drive BAs' behaviors. According to our findings, female-owned businesses receive less equity financing than their male counterparts. This effect is independent from the information available to BAs on the target and persists even when unobservable individual factors are taken into consideration. This disadvantage seems to be linked to male Business Angels' taste prejudice, independently from the information available to the investor. Classification-JEL:G21; G24; G32; J16; G41; M13