How to Rate and Score Private Companies? Evidence from the North Eastern Italian Districts

Is Basel the Right Gateway for a More Efficient Debt Market? An International Comparison

“…In order to answer to the first research question, we need to calculate T(ROI) (Mantovani and Castellan, 2015). Under a methodological point of view, this consists of applying a particular regression (Predictive Regression, here below, as in equation [4]) to each of the ten Countries in order to find the statistically significant indicators, which has the highest predictive power to estimate the future confident equivalent around ROI.…”

“…For each of this independent variable, we consider the autoregressive component, also. ROIi,t = β0 + β1Xi,t + β2Xi,t [4] Mantovani and Castellan (2015). The ranking is compared to the effective debt allocation by banks.…”

“…The sustainability of the corporate performance is depicted in terms of P(ROI) -T(ROI) difference, which is a proxy of the long term merit of credit for the firm according to Mantovani and Castellan (2015). T(ROI) is the long term threshold ROI adjusted on a series of ratios that aim to capture ex ante corporate risk (see Appendix - Table 1 and Table 2).…”

“…The first one is a comparison of two systems (the Continental European and Anglo-Saxon ones) with different levels of application of the regulation itself and different corporate financial systems (the Anglo Saxon Countries being more capital market oriented while the European Countries being more banking centered). This is performed by intersecting two dimensions: the level of banks' financing, which is a proxy for the true banks' credit allocation ability and an innovative rating methodology (Mantovani and Castellan, 2015). The higher the intersection, the more efficient the country in allocating credit to SMEs.…”

The Bank Tailored Integrated Rating

“…Indeed, it must be ensured that the indicator has three characteristics: (i) scientifically reliable and (ii) comprehensible to customers, finally (iii) consistent with the credit policies adopted. The indicator is inspired by the Integrated Rating methodology [5].…”