Journal of Financial Management, Markets and Institutions (ISSN 2282-717X) Fascicolo 2, agosto-di... more Journal of Financial Management, Markets and Institutions (ISSN 2282-717X) Fascicolo 2, agosto-dicembre 2013 Copyright c by Società editrice il Mulino, Bologna. Tutti i diritti sono riservati. Per altre informazioni si veda https://www.rivisteweb.it Licenza d'uso L'articolò e messo a disposizione dell'utente in licenza per uso esclusivamente privato e personale, senza scopo di lucro e senza fini direttamente o indirettamente commerciali. Salvo quanto espressamente previsto dalla licenza d'uso Rivisteweb, ` e fatto divieto di riprodurre, trasmettere, distribuire o altrimenti utilizzare l'articolo, per qualsiasi scopo o fine. Tutti i diritti sono riservati. two anonymous referees for their helpful comments on a previous version of the paper. A special thank goes to the seminar participants at the Abstract Using data at the local market level, we investigate how the increasing presence of foreign banks in Italy affects the interest rate setting on loans and collater...
We provide an in-depth analysis of household wealth in the main advanced countries. We start by a... more We provide an in-depth analysis of household wealth in the main advanced countries. We start by analyzing the evolution of household wealth in Italy since 1950, looking at real and financial assets. Then we compare financial and real assets of households in Canada, France, Germany, Italy, Spain, the UK, the USA and Japan. We distinguish between price and quantity effects as determinants of changes in financial wealth. We study the differences in the composition of household financial wealth across countries, looking at deposits, bonds, shares, mutual funds, and insurance/pension instruments. We summarize the main trends of household debt and conclude comparing net household wealth per capita.
Il lavoro analizza l’andamento del valore di mercato dei derivati delle banche italiane utilizzan... more Il lavoro analizza l’andamento del valore di mercato dei derivati delle banche italiane utilizzando i conti finanziari e proponendo un confronto internazionale. Per il periodo che va dal primo trimestre del 2001 al terzo trimestre del 2008 e stata, inoltre, ottenuta una stima del valore di mercato sfruttando la continuita della serie dei valori nozionali presenti nelle segnalazioni di vigilanza. L’analisi dell’andamento dei derivati bancari nei principali paesi mostra come il loro valore sia significativamente diminuito a seguito della crisi finanziaria. Alla fine del 2015 l’ammontare dei derivati all’attivo delle istituzioni finanziarie monetarie in rapporto al totale delle attivita finanziarie risultava in Italia pari al 4 per cento, valore nettamente inferiore a quello di Regno Unito, Germania e Francia.
The interaction between the financial and the real sectors of the econ- omy has been studied inte... more The interaction between the financial and the real sectors of the econ- omy has been studied intensively in the past- We may refer to different strands of the literature, such as the correlation between money and national income (Friedman and Schwartz, 1963); the non-monetary effects of the banking crises in the propagation of the Great Depres- sion (Bernanke, 1983); the links between money, credit and GDP (Sims, 1972; Bernanke and Blinder, 1988, 1992); and the bank lending channel (Kashyapetal., 1993).
Using a very large panel dataset of Italian manufacturing ¿rms, we test an empirical model of for... more Using a very large panel dataset of Italian manufacturing ¿rms, we test an empirical model of foreign markets participation with sunk costs. The period of analysis (19821999) is exceptionally informative: the large Àuctuations in the lira exchange rate determined substantial Àows of ¿rms in and out of foreign markets. We ¿nd that sunk costs of exporting are very important: past experience in foreign markets increases the probability of exporting by about 70 percentage points. Although the assets entailing such costs depreciate quite slowly, new exporters have to acquire them very soon after entry. Altogether, these results suggest that the break in the Italian aggregate export supply function caused by the depreciation of the 1990s can be considerable and long-lasting. We then relate sunk costs to ¿rm size and ¿nd that they are an important barrier to export, especially for the myriad of Italian small and medium ¿rms. Finally, we provide some new evidence that sunk costs are indeed ...
The present paper explores the internationalization process of Italian companies in the Chinese m... more The present paper explores the internationalization process of Italian companies in the Chinese market, focusing on the analysis of facilitating factors and perceived difficulties. In order to make a comparison, both companies operating and willing to enter the Chinese market have been analyzed. The study was based on the development and administration of a self-administered questionnaire. The analysis, exploratory in nature, was carried out by analyzing a sample of 238 companies operating or willing to enter the Chinese market. The findings suggest that internal facilitating factors (such as the entrepreneurial vision, brand and company know how) are more important than external ones; furthermore Italian companies selling in China have to deal with some complex difficulties which are partly differently perceived by those firms not yet operating in the market. The findings provide marketing executives useful insights in developingentry and distribution strategies for Italian product...
This paper studies the performance of the market value of the derivatives for Italian banks by us... more This paper studies the performance of the market value of the derivatives for Italian banks by using the financial accounts and proposing an international comparison. An estimate of the market value was also obtained for the period from the first quarter of 2001 to the third quarter of 2008 by exploiting the continuity of the notional values found in the supervisory reports. Our analysis of the performance of banking derivatives in the major countries shows that their value has significantly decreased since the financial crisis. At the end of 2015, the amount of financial derivatives reported in the assets of monetary financial institutions was 4 per cent of the total financial assets in Italy, a much lower value than in the UK, Germany and France.
Journal of Financial Management Markets and Institutions, 2013
Ente di afferenza: () Copyright c by Società editrice il Mulino, Bologna. Tutti i diritti sono ri... more Ente di afferenza: () Copyright c by Società editrice il Mulino, Bologna. Tutti i diritti sono riservati. Per altre informazioni si veda https://www.rivisteweb.it Licenza d'uso L'articoloè messo a disposizione dell'utente in licenza per uso esclusivamente privato e personale, senza scopo di lucro e senza fini direttamente o indirettamente commerciali. Salvo quanto espressamente previsto dalla licenza d'uso Rivisteweb,è fatto divieto di riprodurre, trasmettere, distribuire o altrimenti utilizzare l'articolo, per qualsiasi scopo o fine. Tutti i diritti sono riservati.
The Financial Systems of Industrial Countries, 2011
In the mid-1990s, the International Monetary Fund promoted a new approach to country analyses tha... more In the mid-1990s, the International Monetary Fund promoted a new approach to country analyses that was better able to recognize the signs of impending financial crisis. However, the size of internationally exchanged assets and the links between resident and non-resident real and financial sectors increased considerably in the following decade, at a similar pace to (perceived) liquidity, making the effects of imbalances in the international economic system more difficult to control. The enormous increase in liquidity diverted attention from maturity mismatches, sewing the seeds of the 2008–09 “Great Recession”. In this chapter we consider whether a closer look at financial accounts statistics would have made it possible to anticipate the mounting turmoil. Our conclusion is that it would have helped only partially. The massive increase in international integration, which made it clear that any financial shocks would have global effects, and the strong reduction in household savings could have been anticipated. However, maturity mismatches and unsustainable prices of real and financial assets, two other major causes of the financial crisis, could not easily be seen from the financial accounts. It also emerges clearly that stock imbalances are less capable of signalling upcoming problems, while too rapid changes in financial positions provide stronger pointers and therefore need to be monitored closely. Indeed, a more careful scrutiny of financial accounts would have given at least some indication of the magnitude of the dangers ahead.
According to macroeconomic predictions firms are expected to be net borrowers: the net change of ... more According to macroeconomic predictions firms are expected to be net borrowers: the net change of their financial assets should be smaller than the net change of their financial liabilities. However in the last years firms were often net lenders in countries such as Japan, the UK, Germany and the Netherlands. On the contrary firms remained on average net borrowers in countries such as France, Italy and the US. We investigate the sources of corporate sector surpluses and deficits using panel data techniques. Our statistics include 18 industrial countries over the period 1995-2014. We find that firms' surpluses and deficits are linked to national output gaps, ratios of corporate investment to GDP, private consumption, net foreign direct investments and companies' profits. This econometric evidence is robust to the inclusion in the regressions of variables such as oil price, firms' leverage, countries' financial openness.
The derivatives market has experienced quick growth all over the world in the last two decades. B... more The derivatives market has experienced quick growth all over the world in the last two decades. Banks decide to participate in the derivatives market either to hedge against unexpected movements in economic variables or for trading and broker-dealer activities. This paper analyses, by means of multivariate descriptive statistical tools, the determinants of Italian banks' use of derivatives over a long time horizon (2003-2017) by using quarterly Bank of Italy supervisory data. We find that size and being part of a banking group positively affect banks' use of derivatives. Moreover, banks mainly employ derivatives for hedging purposes, especially to hedge against interest rate and credit risks. Finally, derivatives represent a hedging alternative to capital and liquidity. Our results are robust to different specifications that take into account the classification of derivatives by purpose (hedging versus trading) and the distinction between dealer versus end-user banks.
The paper studies the long-term evolution of household wealth in order to compare the changes in ... more The paper studies the long-term evolution of household wealth in order to compare the changes in Italian financial wealth and real wealth with those of the most advanced countries. In Italy households’ real wealth is 5.5 times disposable income, while housing wealth is 4.6 times, and financial wealth is 3.8 times disposable income. Therefore total gross wealth is around 9.3 times disposable income. Given that household liabilities make up 80 per cent of disposable income, total net wealth is 8.5 times income. In France and Spain household non-financial wealth also exceeds that of financial assets, while the contrary holds in the United States and in Germany. In Italy the ratio of gross financial wealth to disposable income is in line with that in France, greater than in Spain and Germany, and smaller than in the USA, Japan, the UK, and Canada. With the exception of Germany and Japan, changes in financial assets are mainly due to price changes in financial instruments – holding gains or losses – rather than to financial transactions. In the last two decades the financial portfolio of Italian households has become more similar to the average portfolio of the advanced economies. Italian household debt is the lowest by international comparison.
According to macroeconomic predictions firms are expected to be net borrowers: the net change of ... more According to macroeconomic predictions firms are expected to be net borrowers: the net change of their financial assets should be smaller than the net change of their financial liabilities. However, since the mid-1990s, the non–financial sector has been on average a net lender in countries such as Japan, the UK, Germany and the Netherlands. Conversely firms remained on average net borrowers in countries such as France, Italy and the US. Using financial accounts, we investigate the sources of corporate sector surpluses and deficits applying panel data techniques. Our statistics include 18 industrial countries over the period 1995-2014. We find that firms’ surpluses are structurally linked to net foreign direct investments. The econometric results are robust to the use of variables that control for the business cycle, such as the output gap, the ratio of corporate investment to GDP, firms’ profits and leverage, and taxation.
Journal of Financial Management, Markets and Institutions (ISSN 2282-717X) Fascicolo 2, agosto-di... more Journal of Financial Management, Markets and Institutions (ISSN 2282-717X) Fascicolo 2, agosto-dicembre 2013 Copyright c by Società editrice il Mulino, Bologna. Tutti i diritti sono riservati. Per altre informazioni si veda https://www.rivisteweb.it Licenza d'uso L'articolò e messo a disposizione dell'utente in licenza per uso esclusivamente privato e personale, senza scopo di lucro e senza fini direttamente o indirettamente commerciali. Salvo quanto espressamente previsto dalla licenza d'uso Rivisteweb, ` e fatto divieto di riprodurre, trasmettere, distribuire o altrimenti utilizzare l'articolo, per qualsiasi scopo o fine. Tutti i diritti sono riservati. two anonymous referees for their helpful comments on a previous version of the paper. A special thank goes to the seminar participants at the Abstract Using data at the local market level, we investigate how the increasing presence of foreign banks in Italy affects the interest rate setting on loans and collater...
We provide an in-depth analysis of household wealth in the main advanced countries. We start by a... more We provide an in-depth analysis of household wealth in the main advanced countries. We start by analyzing the evolution of household wealth in Italy since 1950, looking at real and financial assets. Then we compare financial and real assets of households in Canada, France, Germany, Italy, Spain, the UK, the USA and Japan. We distinguish between price and quantity effects as determinants of changes in financial wealth. We study the differences in the composition of household financial wealth across countries, looking at deposits, bonds, shares, mutual funds, and insurance/pension instruments. We summarize the main trends of household debt and conclude comparing net household wealth per capita.
Il lavoro analizza l’andamento del valore di mercato dei derivati delle banche italiane utilizzan... more Il lavoro analizza l’andamento del valore di mercato dei derivati delle banche italiane utilizzando i conti finanziari e proponendo un confronto internazionale. Per il periodo che va dal primo trimestre del 2001 al terzo trimestre del 2008 e stata, inoltre, ottenuta una stima del valore di mercato sfruttando la continuita della serie dei valori nozionali presenti nelle segnalazioni di vigilanza. L’analisi dell’andamento dei derivati bancari nei principali paesi mostra come il loro valore sia significativamente diminuito a seguito della crisi finanziaria. Alla fine del 2015 l’ammontare dei derivati all’attivo delle istituzioni finanziarie monetarie in rapporto al totale delle attivita finanziarie risultava in Italia pari al 4 per cento, valore nettamente inferiore a quello di Regno Unito, Germania e Francia.
The interaction between the financial and the real sectors of the econ- omy has been studied inte... more The interaction between the financial and the real sectors of the econ- omy has been studied intensively in the past- We may refer to different strands of the literature, such as the correlation between money and national income (Friedman and Schwartz, 1963); the non-monetary effects of the banking crises in the propagation of the Great Depres- sion (Bernanke, 1983); the links between money, credit and GDP (Sims, 1972; Bernanke and Blinder, 1988, 1992); and the bank lending channel (Kashyapetal., 1993).
Using a very large panel dataset of Italian manufacturing ¿rms, we test an empirical model of for... more Using a very large panel dataset of Italian manufacturing ¿rms, we test an empirical model of foreign markets participation with sunk costs. The period of analysis (19821999) is exceptionally informative: the large Àuctuations in the lira exchange rate determined substantial Àows of ¿rms in and out of foreign markets. We ¿nd that sunk costs of exporting are very important: past experience in foreign markets increases the probability of exporting by about 70 percentage points. Although the assets entailing such costs depreciate quite slowly, new exporters have to acquire them very soon after entry. Altogether, these results suggest that the break in the Italian aggregate export supply function caused by the depreciation of the 1990s can be considerable and long-lasting. We then relate sunk costs to ¿rm size and ¿nd that they are an important barrier to export, especially for the myriad of Italian small and medium ¿rms. Finally, we provide some new evidence that sunk costs are indeed ...
The present paper explores the internationalization process of Italian companies in the Chinese m... more The present paper explores the internationalization process of Italian companies in the Chinese market, focusing on the analysis of facilitating factors and perceived difficulties. In order to make a comparison, both companies operating and willing to enter the Chinese market have been analyzed. The study was based on the development and administration of a self-administered questionnaire. The analysis, exploratory in nature, was carried out by analyzing a sample of 238 companies operating or willing to enter the Chinese market. The findings suggest that internal facilitating factors (such as the entrepreneurial vision, brand and company know how) are more important than external ones; furthermore Italian companies selling in China have to deal with some complex difficulties which are partly differently perceived by those firms not yet operating in the market. The findings provide marketing executives useful insights in developingentry and distribution strategies for Italian product...
This paper studies the performance of the market value of the derivatives for Italian banks by us... more This paper studies the performance of the market value of the derivatives for Italian banks by using the financial accounts and proposing an international comparison. An estimate of the market value was also obtained for the period from the first quarter of 2001 to the third quarter of 2008 by exploiting the continuity of the notional values found in the supervisory reports. Our analysis of the performance of banking derivatives in the major countries shows that their value has significantly decreased since the financial crisis. At the end of 2015, the amount of financial derivatives reported in the assets of monetary financial institutions was 4 per cent of the total financial assets in Italy, a much lower value than in the UK, Germany and France.
Journal of Financial Management Markets and Institutions, 2013
Ente di afferenza: () Copyright c by Società editrice il Mulino, Bologna. Tutti i diritti sono ri... more Ente di afferenza: () Copyright c by Società editrice il Mulino, Bologna. Tutti i diritti sono riservati. Per altre informazioni si veda https://www.rivisteweb.it Licenza d'uso L'articoloè messo a disposizione dell'utente in licenza per uso esclusivamente privato e personale, senza scopo di lucro e senza fini direttamente o indirettamente commerciali. Salvo quanto espressamente previsto dalla licenza d'uso Rivisteweb,è fatto divieto di riprodurre, trasmettere, distribuire o altrimenti utilizzare l'articolo, per qualsiasi scopo o fine. Tutti i diritti sono riservati.
The Financial Systems of Industrial Countries, 2011
In the mid-1990s, the International Monetary Fund promoted a new approach to country analyses tha... more In the mid-1990s, the International Monetary Fund promoted a new approach to country analyses that was better able to recognize the signs of impending financial crisis. However, the size of internationally exchanged assets and the links between resident and non-resident real and financial sectors increased considerably in the following decade, at a similar pace to (perceived) liquidity, making the effects of imbalances in the international economic system more difficult to control. The enormous increase in liquidity diverted attention from maturity mismatches, sewing the seeds of the 2008–09 “Great Recession”. In this chapter we consider whether a closer look at financial accounts statistics would have made it possible to anticipate the mounting turmoil. Our conclusion is that it would have helped only partially. The massive increase in international integration, which made it clear that any financial shocks would have global effects, and the strong reduction in household savings could have been anticipated. However, maturity mismatches and unsustainable prices of real and financial assets, two other major causes of the financial crisis, could not easily be seen from the financial accounts. It also emerges clearly that stock imbalances are less capable of signalling upcoming problems, while too rapid changes in financial positions provide stronger pointers and therefore need to be monitored closely. Indeed, a more careful scrutiny of financial accounts would have given at least some indication of the magnitude of the dangers ahead.
According to macroeconomic predictions firms are expected to be net borrowers: the net change of ... more According to macroeconomic predictions firms are expected to be net borrowers: the net change of their financial assets should be smaller than the net change of their financial liabilities. However in the last years firms were often net lenders in countries such as Japan, the UK, Germany and the Netherlands. On the contrary firms remained on average net borrowers in countries such as France, Italy and the US. We investigate the sources of corporate sector surpluses and deficits using panel data techniques. Our statistics include 18 industrial countries over the period 1995-2014. We find that firms' surpluses and deficits are linked to national output gaps, ratios of corporate investment to GDP, private consumption, net foreign direct investments and companies' profits. This econometric evidence is robust to the inclusion in the regressions of variables such as oil price, firms' leverage, countries' financial openness.
The derivatives market has experienced quick growth all over the world in the last two decades. B... more The derivatives market has experienced quick growth all over the world in the last two decades. Banks decide to participate in the derivatives market either to hedge against unexpected movements in economic variables or for trading and broker-dealer activities. This paper analyses, by means of multivariate descriptive statistical tools, the determinants of Italian banks' use of derivatives over a long time horizon (2003-2017) by using quarterly Bank of Italy supervisory data. We find that size and being part of a banking group positively affect banks' use of derivatives. Moreover, banks mainly employ derivatives for hedging purposes, especially to hedge against interest rate and credit risks. Finally, derivatives represent a hedging alternative to capital and liquidity. Our results are robust to different specifications that take into account the classification of derivatives by purpose (hedging versus trading) and the distinction between dealer versus end-user banks.
The paper studies the long-term evolution of household wealth in order to compare the changes in ... more The paper studies the long-term evolution of household wealth in order to compare the changes in Italian financial wealth and real wealth with those of the most advanced countries. In Italy households’ real wealth is 5.5 times disposable income, while housing wealth is 4.6 times, and financial wealth is 3.8 times disposable income. Therefore total gross wealth is around 9.3 times disposable income. Given that household liabilities make up 80 per cent of disposable income, total net wealth is 8.5 times income. In France and Spain household non-financial wealth also exceeds that of financial assets, while the contrary holds in the United States and in Germany. In Italy the ratio of gross financial wealth to disposable income is in line with that in France, greater than in Spain and Germany, and smaller than in the USA, Japan, the UK, and Canada. With the exception of Germany and Japan, changes in financial assets are mainly due to price changes in financial instruments – holding gains or losses – rather than to financial transactions. In the last two decades the financial portfolio of Italian households has become more similar to the average portfolio of the advanced economies. Italian household debt is the lowest by international comparison.
According to macroeconomic predictions firms are expected to be net borrowers: the net change of ... more According to macroeconomic predictions firms are expected to be net borrowers: the net change of their financial assets should be smaller than the net change of their financial liabilities. However, since the mid-1990s, the non–financial sector has been on average a net lender in countries such as Japan, the UK, Germany and the Netherlands. Conversely firms remained on average net borrowers in countries such as France, Italy and the US. Using financial accounts, we investigate the sources of corporate sector surpluses and deficits applying panel data techniques. Our statistics include 18 industrial countries over the period 1995-2014. We find that firms’ surpluses are structurally linked to net foreign direct investments. The econometric results are robust to the use of variables that control for the business cycle, such as the output gap, the ratio of corporate investment to GDP, firms’ profits and leverage, and taxation.
Uploads
Papers by Luigi Infante