Foto del docente

Paola Brighi

Associate Professor

Department of Management

Academic discipline: SECS-P/11 Financial Markets and Institutions


Keywords: distance and efficiency mutual banks asymmetric information corporate banking self-selection models SMEs relationship lending

Relationship lending, distance and efficiency

Banking and corporate finance

SMEs, R&D and corporate finance

Corporate banking and SMEs

Cooperative Credit Institutions

Credit risk and internal rating

With reference to the first topic we observe that during the last decades banks have progressively moved towards centralized and hierarchical organizational structures. Therefore, the investigation of the determinants of bank efficiency and relationships with the functional distance between the bank head-quarter and operational units have become increasingly important. This paper extends the literature on bank efficiency examining the impact of different bank business models on the efficiency of the Italian banks, distinguished by size and type over the period 2006-2009. Using a stochastic frontier approach, the intertemporal relationships between bank efficiency and some key variables, as distance and income diversification (used as proxies of different organizational banking models) are investigated. Results suggest that organizational structure significantly affects cost efficiency, being different between bank groups.


The second topic of the research is the analysis of the determinants of Italian SMEs' choices of sources of finance, with specific reference to the role of informed (internal) capital compared to other forms of finance. In this work, we aim to identify the determinants of the mix of sources of finance using data from the Survey of Italian Firms conducted by Capitalia, bearing in mind the structural characteristics of the firms and the banking market, and the problems of the information asymmetry between the bank and the firm. Although the financial hierarchy theory suggests that firms prefer self-financing, because it is less expensive in economic terms, relationships with local banks may offer advantages which encourage firms to enter into debt contracts even in the absence of binding internal constraints. The empirical study focused in particular on the role of self-financing as an alternative to external sources. In order to measure the decision to use self-financing and the subsequent composition of the financing mix, we used different techniques, first independent models and then a self-selection model. The first results, in line with the pecking order theory, confirm an approach comprising an initial check on the availability of internal resources, followed if by the use of external capital, including bank debt.


Related to the third topic we identify the different role of financial funds in traditional and R&D investments in Italian firms. Given its intrinsic characteristics, R&D is usually characterized by high information opacity and thus implies, coherently with the asymmetric information theory, greater difficulties in finding external financial funding. The higher risk related to R&D projects could entail some form of financial constraints. However, signaling mechanisms such as self-financing could correct such a market imperfection. The aim of this research is to investigate the determinants of R&D investment internal financial funding (self-financing). Traditional and R&D investments are considered to indicate a possible interaction between different self-financing patterns. Using different econometric models (Logit, OLS and SUR), our results show how information and agency costs, reflected in firm characteristics, affect financing decisions in both traditional and R&D investments. Our findings are consistent with the hypothesis that, in information opaque firms, internal equity plays an important role in R&D financing decisions. To the contrary, traditional investments are less related to self-financing. Public subsidies play a crucial role as a stimulus of R&D and investment self-financing. The overall evidence indicates that banking variables are also more relevant in traditional investments.

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