Do cooperative banks matter for new business creation? Evidence on Italian manufacturing industry

This work empirically investigates Italian cooperative banks (BCCs) as a driver of new business creation in the Italian provinces over the period 2003–12. The results show that the presence of BCCs positively and significantly affects firms’ entry rates. We also find that the impact of BCCs diffusion on birth rate tends to be stronger for high tech industries during the pre-crisis years, whilst it appears larger for low-tech sectors when considering the post-crisis period. This evidence suggests that BCCs might play a relevant role in financing innovative and risky firms—though, when banks’ risk-aversion increases, BCCs tend, unsurprisingly, to downsize the financing of riskier projects