Abstract: What are the e\u001bects of local credit institutions on the distribution of income? Why should local banking development matter for the level of inequality? We focus on how di\u001berent dimensions of banking development and other characteristics of 103 provinces in Italy a\u001bect the level of inequality.
Using panel estimation and data over the period 2006-2010, we \u001cnd that local banking development has a signi\u001ccant negative e\u001bect on the Gini coe\u001ecient and other measures of inequality, i.e. higher banking development is associated with lower inequality. When considering Italian macro-areas subsamples (North, Center, South), the result is robust only for the North; thus suggesting the existence of potential non-linearities in the functioning of the \u001cnance-inequality nexus, depending on the level of development. We \u001cnd that the coe\u001ecient on banking development becomes negative and significant after reaching a certain level of the median per capita GDP and after the \u001cnancial sector has achieved a reasonably high level of development. We, finally, explore other dimensions that might lead to a non
linear relationship between \u001cnance and inequality by considering the level of unemployment, the level of education and an index of \u001cnancial dependence of the industrial sector.<\/p>\n","protected":false},"excerpt":{"rendered":"
D\u2019Onofrio A, Murro P. CASMEF Working Paper Series. 2013;(7). <\/p>\n","protected":false},"template":"","publication_type":[559],"class_list":["post-8678","casmef_publication","type-casmef_publication","status-publish","hentry"],"acf":{"pub_unit":7855,"pub_file":8677},"yoast_head":"\n