Firm innovation and local bank efficiency in Italy: Does the type of bank matter?

In this study, we use a conventional Probit model to investigate the effects of banks’ cost efficiency on innovation in Italy. particular, assess whether efficiency–innovation relation depends type banking institutions, as partition them according they are cooperatives or non-cooperatives. When examine two types financial intermediaries simultaneously, higher among cooperative banks has positive and significant effect R&D collaborations with firms consultants process innovation, while non-cooperative product innovation. consider each individually, holds for cooperatives, but opposite non-cooperatives, vanishes. To deal likely endogeneity bank efficiency, also propose application an Instrumental Variable (IV Probit) model. again jointly banks, our evidence indicates that enhances in-house both innovations, find non-significant banks. However, when individually intermediary, between innovations.