SME financing and the choice of lending technology in Italy: Complementarity or substitutability?

Bartoli, Francesca; Ferri, Giovanni; Murro, Pierluigi; Rotondi, Zeno

doi:10.1016/j.jbankfin.2013.08.007

Cited by 100 publications

(65 citation statements)

References 26 publications

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“…Other recent papers suggest that even adequately decentralized large banks could be able to generate soft information and include it in the credit evaluation process (Canales and Nanda, 2012;Uchida et al, 2012;Bartoli et al, 2013). These articles evidence that it is possible for large banks to engage in relationship lending if they permit their local branch managers to interact frequently with customers, delegate decision making at a lower level and grant branches more autonomy.…”

Section: =>mentioning

confidence: 99%

“…Reassuming, firms can benefit from better credit availability in a long-term relationship (Petersen and Rajan, 1994;Berger and Udell, 1995;Cole, 1998;Harhoff and Körting, 1998;Brick and Palia, 2007;Peltoniemi, 2007;Bartoli et al, 2013;Fiordelisi et al, 2013), but at the same time they can suffer from the hold-up phenomenon (Angelini et al, 1998;Lehmann and Neuberger, 2001;Ioannidou and Ongena, 2010;Gambini and Zazzaro, 2013;Stein, 2015; see Table 4). Apart from the hold-up risk in long-term and exclusive relationships between banks and firms, the possibility of a different phenomenon exists: the soft-budget constraint.…”

Section: The Firm-bank Relationship Durationmentioning

confidence: 99%

“…The role of qualitative information is emphasized in Uchida et al (2012), Bartoli et al (2013), and Moro et al (2015). In a nutshell, the methodological approach in these papers is based on questionnaires that bank or firm managers are asked to fill.…”

Section: The Importance Of Lender-borrow Mutual Trustworthiness and Tmentioning

confidence: 99%

“…Berger et al (2011) indicate that small banks in USA have started adopting other arm's length lending technologies along with relationship lending. There is still little evidence that this is being replicated in other countries, although as previously mentioned, Basel guidelines encourage a similar approach (Bartoli et al, 2013).…”

Section: Differences Between Financial Systemsmentioning

confidence: 99%

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Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

Duqi

Tomaselli

Torluccio

2017

Journal of Economic Surveys

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Relationship lending is a common lending technology that is assumed to bring several benefits to small‐medium enterprises (SMEs) and to financial institutions that adopt it. Notably, it could reduce information asymmetries, permitting banks to offer better credit terms to the borrower. However, it also entails some costs for both sides. The empirical evidence so far has not been conclusive in determining under what conditions relationship lending can be beneficial or harmful. Most of the studies suggest that SMEs that engage in relationship lending benefit from more credit availability (especially during a financial crisis), and lower interest rates. This occurs when they are served by small banks, are geographically close to the lender, when the bank is adequately decentralized and when it is the dominant creditor of the firm. However, under certain circumstances, banks can extract rents from the borrower or be captured by him. In addition, the consequences and the future of relationship lending will be remarkably affected by the level of competition among banks, their ownership structure, the regulatory framework and the business model that banks will have to adopt accordingly.

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Section: =>mentioning

confidence: 99%

Section: The Firm-bank Relationship Durationmentioning

confidence: 99%

Section: The Importance Of Lender-borrow Mutual Trustworthiness and Tmentioning

confidence: 99%

Section: Differences Between Financial Systemsmentioning

confidence: 99%

See 2 more Smart Citations

Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

Duqi

Tomaselli

Torluccio

2017

Journal of Economic Surveys

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“…Berger and Black (2011) suggest that large banks do not have equal advantages in hard fixed-assets lending technologies and these advantages are not all increasing monotonically in firm size. Studies from different countries argue and develop these ideas (Shen & Shen, 2009;Bartoli et al, 2013).…”

mentioning

confidence: 99%

Bank Lending to Small and Medium Sized Business: Evidence from Russia

Korolev¹

2015

ASS

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Access of small-and medium-sized enterprises (SMEs) to external financing sources is defined in many respects by the tendencies of bank system development in different countries as well as by the possibilities and interest of commercial banks to make loans to creditworthy small-and medium-sized borrowers. In the present paper, we suggest that even in post-crisis conditions, this is small-and medium-sized Russian banks, rather than large banking institutions, that tend to issue loans to small and medium-sized enterprises. Analysis of the data available from the Russian banks gives evidence that with the growth of the bank size and with widening of the scope of the bank's activity, bank's lending to legal entities, in particular, to SMEs and to individual entrepreneurs, tends to become more intense. At the same time, the share of lending to SMEs and individual entrepreneurs in the legal entities loan portfolio tends to decrease.

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Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

Duqi

Tomaselli

Torluccio

2019

Contemporary Topics in Finance

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SME financing and the choice of lending technology in Italy: Complementarity or substitutability?

Cited by 100 publications

References 26 publications

Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

Bank Lending to Small and Medium Sized Business: Evidence from Russia

Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

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