The Role of Culture in Firm-Bank Matching

58 Pages Posted: 12 Jul 2021 Last revised: 29 Dec 2021

See all articles by Antonio Accetturo

Antonio Accetturo

Bank of Italy

Giorgia Barboni

University of Warwick - Finance Group

Michele Cascarano

Bank of Italy

Emilia Garcia-Appendini

University of Zurich - Department of Banking and Finance

Date Written: July 8, 2021

Abstract

We assemble a unique dataset containing population-level information on loan applications in a region hosting two cultural groups to study the role of culture in firm borrowing decisions. We find that firms are more likely to apply for loans to culturally-close banks. This effect is stronger for opaque firms, but not for less performing firms, indicating that firms do not expect a preferential treatment from same-culture banks. Loan applications to culturally distant banks increase sharply with firms’ size and age. Our results suggest that culture is an important determinant of firm-bank matching which facilitates the transmission of soft information.

Keywords: Culture; Loan applications; Asymmetric information; Bank-firm matching

JEL Classification: G21, G30, Z1

Suggested Citation

Accetturo, Antonio and Barboni, Giorgia and Cascarano, Michele and Garcia-Appendini, Emilia, The Role of Culture in Firm-Bank Matching (July 8, 2021). Available at SSRN: https://ssrn.com/abstract=3882637 or http://dx.doi.org/10.2139/ssrn.3882637

Antonio Accetturo

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giorgia Barboni

University of Warwick - Finance Group ( email )

Gibbet Hill Rd
Coventry, CV4 7AL
Great Britain

Michele Cascarano

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Emilia Garcia-Appendini (Contact Author)

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

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