Using rich, unique data from the Italian local credit markets (provinces), this paper inves-tigates the impact of local banking development on income inequality and the role of thesocioeconomic structure in this link. Exploiting the Italian historical banking regulation toinstrument for the local presence of bank branches, we find that local banking develop-ment mitigates income inequality. However, the finance-inequality nexus manifests itselfonly in relatively advanced areas. When we study the structural channels of influence, weuncover evidence that banking development can reduce inequality by affecting geographical mobility and urbanization, while it has modest effects through the development ofmaterial infrastructures and human capital.

Banking Development, Socioeconomic Structure and Income Inequality / D'Onofrio, Alexandra; Minetti, Raoul; Murro, Pierluigi. - In: JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION. - ISSN 0167-2681. - 157:(2019), pp. 428-451. [10.1016/j.jebo.2017.08.006]

Banking Development, Socioeconomic Structure and Income Inequality

Pierluigi Murro
2019

Abstract

Using rich, unique data from the Italian local credit markets (provinces), this paper inves-tigates the impact of local banking development on income inequality and the role of thesocioeconomic structure in this link. Exploiting the Italian historical banking regulation toinstrument for the local presence of bank branches, we find that local banking develop-ment mitigates income inequality. However, the finance-inequality nexus manifests itselfonly in relatively advanced areas. When we study the structural channels of influence, weuncover evidence that banking development can reduce inequality by affecting geographical mobility and urbanization, while it has modest effects through the development ofmaterial infrastructures and human capital.
2019
Income inequality; Financial development; Socioeconomic structure
Banking Development, Socioeconomic Structure and Income Inequality / D'Onofrio, Alexandra; Minetti, Raoul; Murro, Pierluigi. - In: JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION. - ISSN 0167-2681. - 157:(2019), pp. 428-451. [10.1016/j.jebo.2017.08.006]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/181754
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