A Caltech Library Service

Fiduciari and Firm Liquidity Constraints: The Italian Experience with German-Style Universal Banking

Fohlin, Caroline (1996) Fiduciari and Firm Liquidity Constraints: The Italian Experience with German-Style Universal Banking. Social Science Working Paper, 948. California Institute of Technology , Pasadena, CA. (Unpublished)

[img] PDF (sswp 948 - May 1996) - Submitted Version
See Usage Policy.


Use this Persistent URL to link to this item:


This study presents new evidence on the role of bank relationships in attenuating Italian firms' liquidity constraints and interprets the findings in comparison with those from a similar study of the German case. Employing investment models on a panel of 170 firms between 1903 and 1911, the analysis shows that bank relationships had little effect on the liquidity constraints of the general population of investing firms, but that they may have attenuated liquidity constraints for new firms. Analysis of the characteristics associated with bank-attached firms indicates that such firms were significantly different from independent firms, and that German-style banks may, therefore, have been important for ex ante monitoring and signaling to investors. The results for Italy accord well with the German experience, and thus universal banking appears, in general, to have had limited impact on the investment patterns of firms during industrialization.

Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription ItemPublished Version
Fohlin, Caroline0000-0002-1380-2788
Additional Information:This paper is a substantially revised version of Chapters 8 and 9 of my dissertation. I am grateful to Lance Davis, Jeff Dubin, Barry Eichengreen, David Grether, John Latting, Richard Meese, David Romer, Richard Tilly, and Gianni Toniolo as well as to workshop participants at Berkeley, Caltech, Illinois, the University of Munster, and Northwestern University and conference participants at the 1996 Congress of the European Association of Historical Economics for helpful discussions and comments on earlier drafts. I am indebted to Francesca Pino-Pongolini and Laura Contini of the Comit Archive for providing important data as well as general guidance in beginning this project. I also thank Teresa Pandolfi of the Bank of Italy archive for providing photocopies of the data source. Financial support from the Joint Committee on Western Europe of the American Council of Learned Societies and the Social Science Research Council (with funds provided by the Ford and Mellon Foundations), the Center for German and European Studies at U.C. Published as Fohlin, Caroline. "Fiduciariand Firm Liquidity Constraints: The Italian Experience with German-Style Universal Banking." Explorations in Economic History 35, no. 1 (1998): 83-107.
Group:Social Science Working Papers
Funding AgencyGrant Number
Social Science Research CouncilUNSPECIFIED
American Council of Learned SocietiesUNSPECIFIED
Andrew W. Mellon FoundationUNSPECIFIED
Ford FoundationUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:948
Record Number:CaltechAUTHORS:20170817-142157556
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80574
Deposited By: Jacquelyn Bussone
Deposited On:21 Aug 2017 17:08
Last Modified:03 Oct 2019 18:32

Repository Staff Only: item control page