The issue of territorial divides in access to credit for firms has long been debated in Italy. This work contributes to that debate by providing an updated and enriched analysis of the indicators used, which aims to assess whether in the South, where some negative externalities are more marked than in the North, firms face greater difficulties in access to credit than in the rest of the country.
The study shows that, after controlling for firm and lending bank characteristics, in the period 2010-19, southern firms paid a higher cost for credit (by about 70 basis points, on average) and provided collateral more frequently than in the Centre and North. The negative externalities, which are more marked in the South of Italy (such as lower efficiency of civil justice, greater prevalence of crime, lack of social capital), contribute to the less favourable conditions of access to credit, which in turn lead to a lower propensity of southern firms to apply for new loans.
