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The Influence of Macro factors On Residential Mortgage In Italy
Umberto Filotto, Claudio Giannotti, Gianluca Mattarocci, Xenia Scimone
Pages - 103 - 115     |    Revised - 08-01-2021     |    Published - 01-06-2021
Volume - 12   Issue - 3    |    Publication Date - June 2021  Table of Contents
Italy, Residential Mortgage, Economic Factors, Informal Sector.
This paper examines the role of macro-economic variables, including informal sector, on the growth of the mortgage market in Italy, from 1999 to 2019. We start testing normality, correlation (Pearson) and multicollinearity, then we apply theoretical benchmark model following the approach proposed by Wichura (2006) using a linear regression model. Based on the main findings of this study we show that there a positive and potentially high correlation between residential mortgage and informal sector. In particular, we find that a unit increase in Percentage informal sector employment will cause an increase in residential mortgage. May be counterintuitive as the informal sector magnitude should represent a weaker access to credit for borrowers; nevertheless it may also be the case that informal sector increase anticipate GDP growth signalling a subsequent positive economic downturn. Thus, financial institutions will increase residential mortgage due to the informal sector growth signalling a positive economic trend. This work may help them suggesting how to include informal sector dynamics into residential mortgage pricing, as well as policymakers to read residential mortgage market dynamics and derive informal sector insights.
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Mr. Umberto Filotto
Department Management and Law, Faculty of Economics, University of Tor Vergata, Rome, 00133 - Italy
Mr. Claudio Giannotti
Department Management and Law, Faculty of Economics, University LUMSA, Rome, 00192 - Italy
Mr. Gianluca Mattarocci
Department Management and Law, Faculty of Economics, University of Tor Vergata, Rome, 00133 - Italy
Mrs. Xenia Scimone
Department Management and Law, Faculty of Economics, University of Tor Vergata, Rome, 00133 - Italy

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