Access to Credit and Economic Complexity:Evidence from Italian Provinces

This paper focuses on the relationship between "urbanization economies" and access to bank credit by assessing the role of urbanization externalities in determining credit crunch episodes. Using quarterly data on Italian provinces for the period 2008-2018 and adopting a dynamic (spatial) econometric approach, the work provides robust evidence highlighting how local economic complexity reduces the intensity of credit crunch phenomena. In the presence of a greater "qualified" diversification (higher economic complexity), banks access successful projects with greater probability and are more willing to grant credit. The estimation results also reveal the existence of long-run spatial spillover effects