In Italy, Patti Territoriali (Territorial Pacts) are one of the main government-sponsored programmes to foster growth in disadvantaged areas. A territorial pact is an agreement among the local authorities and representatives of civil society (mainly entrepreneurs and trade unions) of a number of...

The paper examines micro data on Italian manufacturing firms'' inventory behavior to test the Meltzer (1960) hypothesis according to which firms substitute trade credit for bank credit during periods of monetary tightening. It finds that their inventory investment is constrained by the...