Template-Type: ReDIF-Paper 1.0
Author-Name: Alexandra D'Onofrio
Author-X-Name-First: Alexandra
Author-X-Name-Last: D'Onofrio
Author-Email: alexandra.donofrio@assonime.it
Author-Workplace-Name: ASSONIME 
Author-Name: Raoul Minetti 
Author-X-Name-First: Raoul 
Author-X-Name-Last: Minetti
Author-Email: minetti@msu.edu
Author-Workplace-Name: Michigan State University
Author-Name: Pierluigi Murro
Author-X-Name-First: Pierluigi  
Author-X-Name-Last: Murro
Author-Email: p.murro@lumsa.it
Author-Workplace-Name: LUMSA University
Title: Banking development, economic structure and income inequality

Abstract: Using rich data from the Italian local credit markets (provinces), this paper investigates the impact of local banking development on income inequality and the role of the socioeconomic structure in this link. Exploiting the Italian historical banking regulationtoin strument for the local presence of bank branches, we find that local banking development mitigates income inequality and poverty. However, the finance-inequality nexus manifests itself only in relatively advanced areas, suggesting important non-linearities. When we study the structural channels of influence, we obtain evidence that banking development can reduce inequality by affecting geographical mobility and urbanization, while it has modest effects through the development of material infrastructures and human capital. 
Length: 33 pages
Creation-Date: 2016-07
Publication-Status: 
File-URL: https://repec.lumsa.it/wp/wpC08.pdf
File-Format: Application/pdf
Number: wpC08
Classification-JEL: G21; G38; O15
Keywords: Income inequality; Financial development; Socio economic structure
Handle: RePEc:lsa:wpaper:wpC08