Regional entrepreneurship and the structure of the banking market

This paper investigates whether local banking market structure affects regional entrepreneurship, measured by new firm formation. Considering provincial data over the period 2011–21 in Italy, we found that bank concentration and formation had an inverted ‘U’-shaped relationship. Lower levels of fostered formation, but above a share about 58% for largest banks, which is seen South some peripheral inner areas central northern increased reduced However, presence banks beneficial birth firms can reduce negative impact high concentration. These findings suggest plays important role shaping entrepreneurship.