What’s Special About Banking in Italy? Lending Technologies, Complementarity, and Impact of Soft Information

26 Pages Posted: 27 Oct 2011

See all articles by Francesca Bartoli

Francesca Bartoli

Assolombarda

Giovanni Ferri

LUMSA University

Pierluigi Murro

LUISS Guido Carli University - Department of Business and Management

Zeno Rotondi

UNICREDIT; LUISS Guido Carli University

Date Written: October 1, 2010

Abstract

This paper investigates the firm-main bank relationship in a sample of Italy’s SMEs. The findings suggest that banks lend to SMEs via different lending technologies. These results support the hardening-of-soft-information view, whereby also transactional lenders might somehow use difficult to codify qualitative information – traditionally believed a prerogative of relational banks – on borrowing enterprises. However, the soft information lowers (raises) the probability of rationing if the firm’s main bank uses relationship (transactional) lending technologies. Thus, the way the soft information becomes embodied in the lending decision might still differ between relational vs. transactional banks.

Keywords: Lending technology, bank-firm relationship, small business finance

JEL Classification: G21, G30, O16

Suggested Citation

Bartoli, Francesca and Ferri, Giovanni and Murro, Pierluigi and Rotondi, Zeno, What’s Special About Banking in Italy? Lending Technologies, Complementarity, and Impact of Soft Information (October 1, 2010). Available at SSRN: https://ssrn.com/abstract=1950077 or http://dx.doi.org/10.2139/ssrn.1950077

Francesca Bartoli

Assolombarda ( email )

via Pantano 9
Milano, Milano 20122
Italy

Giovanni Ferri

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

HOME PAGE: http://www.lumsa.it/giovanni-ferri

Pierluigi Murro (Contact Author)

LUISS Guido Carli University - Department of Business and Management ( email )

Via Salvini, 3
Rome, 00198
Italy

Zeno Rotondi

UNICREDIT ( email )

VIA SPECCHI 16
ROME, 00186
Italy

HOME PAGE: http://docenti.luiss.it/rotondi

LUISS Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

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