Given the changes that occurred in the organization and specialization of Italian industrial districts and the changing geography of the banking system, in this paper is we aim at reassessing the bank-firm relationship in industrial districts. Using firm-level data on a sample of Italian SME, we examine the determinants of credit rationing and relationship lending. Firstly, we test whether firms located in industrial district area have more access to banking credit and rely more on relationship lending. Secondly, we assess if being localized in industrial clusters have heterogeneous effects due to the structure of local credit markets. Our results point out the firms operating in industrial districts are less credit rationed, while their probability of relationship lending is not significantly different from the one of the average firm. Furthermore, a higher operational proximity of banks to local economies is associated with more access to banking credit and and to a lower probability of engaging in relationship lending, while a higher functional distance of the banking system from local communities is associated with tighter financing constraints and a lower probability of relationship lending. These effects are significantly intensified for firms located inside industrial districts.
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