set on innovation for a large number of Italian firms over the 1990’s. There is evidence that banking development affects … the probability of process innovation, particularly for small firms and for firms in high(er) tech sectors and in sectors … more dependent upon external finance. The evidence for product innovation is weaker. There is also some evidence that …

cut investment, employment, and borrowing. We conclude that financial market fluctuations affect even private firms …

firms to cut investment, employment, and borrowing. We conclude that financial market fluctuations affect even private firms …