Abstract

This paper investigates the role of enduring lending relationships in the performance of Italian SMEs. In doing so, we exploit the bad times that firms experienced with the Dot-com Bubble and the 2007-2008 financial crisis by analysing the productivity outcome measure. The findings reveal a positive correlation between the duration of credit relationships and SMEs’ productivity. Notably, this relationship is influenced by the geographical location of the firm. Additionally, the impact varies among sectors, namely high-tech and low-tech. Specifically, long-lasting lending relationships seem to have a beneficial effect on SMEs’ productivity in the Central and Southern parts of the country.