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    Institutional conformity and regional credit market failures: evidence from the Italian industrial districts

    Andriani, Luca (2015) Institutional conformity and regional credit market failures: evidence from the Italian industrial districts. Working Paper. Birkbeck College, University of London, London, UK.

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    Abstract

    Institutional conformity might help explain regional credit market failures in Italy in terms of insolvency rate. A credit relation is subject to a certain degree of uncertainty about the credible commitment of the parties to fulfil the contract ual obligations. We argue that conformity to informal institutions of reciprocal cooperation and trust can reduce this degree of uncertainty and, hence, contract breaches. We support our argument by conducting an empirical investigation where the regional density of industrial districts is used as indicator of institutional conformity. We find lower insolvency rate in regions with higher institutional conformity. Additionally, we find higher conformity to informal institutions in regions where the punishmen t system reacts quicker to non - compliant behaviours, suggesting a complementary relationship between conformity to informal institutions and lower cost of punishment. One of the advantages of this indicator consists in the possibility of addressing “Ostrom - type” policy recommendations to reduce regional credit market failures.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: BWPMA 1503, ISSN: 2052-0581
    Keyword(s) / Subject(s): Institutional Conformity, Industrial Districts, Insolvency, Three-Period Panel
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Management
    Research Centre: Innovation Management Research, Birkbeck Centre for, Corporate Governance and Ethics, London Centre for
    Depositing User: Administrator
    Date Deposited: 24 Sep 2018 08:42
    Last Modified: 24 Sep 2018 08:42
    URI: http://eprints.bbk.ac.uk/id/eprint/24000

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