The driving forces of credit brokers' diffusion in Italy. An empirical analysis

In the last decade, there has been a tremendous growth of credit brokers (CB) in Italy. Some estimations maintain that about one fourth of residential mortgage loans are intermediated by CB (Europe Economics, 2009); their market shares relative to some leasing and consumer credit products are relevant as well. Despite the importance of credit brokerage services, little empirical research has been devoted to investigate its determinants. In this paper we perform an analysis on CB diffusion in Italian provinces (NUTS3 level) based on spatial panel data model that points at estimating the relevance of spatial effects. Two models are developed in order to identify the determinants of this phenomenon. The results emphasise that CB diffusion is to some extent influenced by socio-economic and banking features of the territory, but estimations reveal also the emergence of an “herding effect” whose occurrence is probably due to the fact that the access to the brokerage profession is not hindered by heavy regulatory requirements.