Spatial Effects in Sustainable Financing: Evidence from Italian SMEs

Sustainable financing plays a crucial role in supporting firms’ ecological transition. This study investigates the determinants of access to green funds and the amount received by Small and Medium Enterprises (SMEs) in Italy, focusing on the characteristics of firms that obtain public financing for sustainability projects. Given the potential influence of industry sectors and spatial proximity on financing dynamics, we explore the existence of spillover effects arising from both group/sectoral belonging and geographical location, conceptualized as inter-firm networks. To test this hypothesis, we first compute indicators of spatial association, and then estimate a Spatial Autoregressive (SAR) model. We find significant spillover effects in both spatial and networked dimensions. Therefore, our results suggest that sectoral structure, firm connectivity, and spatial proximity all contribute to amplifying the diffusion of sustainable financing, with important implications for policies supporting corporate sustainability.