Beyond Banks¡¯ Capitalization: What Affects the Credit Lines?

Carmen Gallucci, Vincenzo Formisano, Michele Modina and Rosalia Santulli

International Journal of Financial Research, 2017, vol. 8, issue 4, 71-79

Abstract: The present paper aims at investigating what affects the credit granting beyond banks¡¯capitalization. It focuses on public and private firms¡¯ information available for the banks. We apply moderating regression models on panel data. Our sample is of 123 co-operative credit banks and more than 11,000 firms operating in Italy between 2012 and 2014, for 18,143 observations. Our main findings suggest that firms¡¯ profitability (public information) positively moderates the direct relationship between banks¡¯ capitalization and credit grants; differently, multiple banking, overdue payment and credit limit violation days (private information) negatively moderate the above-cited relationship. Finally, the conjoint moderating effect of public and private information proves to be negative, thus also firms with a good profitability are penalized in credit grant whether they do not take care the relationship with banks.

Keywords: bank-firm relationship; credit granting; bank capitalization; multiple banking (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:8:y:2017:i:4:p:71-79

DOI: 10.5430/ijfr.v8n4p71

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