We investigate whether family businesses (FBs) suffer stiffer credit rationing in the post-crisis Italian economy. FBs are, in fact, typically more opaque than other firms, possibly deterring bank lending to them. Moreover, regulatory changes may lead many banks to abandon relationship lending, weakening their ability to evaluate opaque firms. Using detailed firm data, our estimates reach nuanced conclusions. First, credit rationing is not more intense at FBs. However, it systematically intensifies if FBs engage in firm-bank arrangements less able to overcome information asymmetries either coupling with a main bank that uses transactional lending or diluting relationships across various banking partners.

Credit rationing and the relationship between family businesses and banks in Italy / Ferri, G; Murro, Pierluigi; Pini, M. - In: GLOBAL FINANCE JOURNAL. - ISSN 1044-0283. - 43:(2020), pp. 1-15. [10.1016/j.gfj.2018.04.003]

Credit rationing and the relationship between family businesses and banks in Italy

Murro P
;
2020

Abstract

We investigate whether family businesses (FBs) suffer stiffer credit rationing in the post-crisis Italian economy. FBs are, in fact, typically more opaque than other firms, possibly deterring bank lending to them. Moreover, regulatory changes may lead many banks to abandon relationship lending, weakening their ability to evaluate opaque firms. Using detailed firm data, our estimates reach nuanced conclusions. First, credit rationing is not more intense at FBs. However, it systematically intensifies if FBs engage in firm-bank arrangements less able to overcome information asymmetries either coupling with a main bank that uses transactional lending or diluting relationships across various banking partners.
2020
Family firms, Firm-bank relationships, Bank lending technologies, Credit rationing
Credit rationing and the relationship between family businesses and banks in Italy / Ferri, G; Murro, Pierluigi; Pini, M. - In: GLOBAL FINANCE JOURNAL. - ISSN 1044-0283. - 43:(2020), pp. 1-15. [10.1016/j.gfj.2018.04.003]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/181759
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