Bank screening technologies and the founder effect: Evidence from European lending relationships

Marco Cucculelli and Valentina Peruzzi

Finance Research Letters, 2017, vol. 20, issue C, 229-237

Abstract: This article provides evidence on the existence of a founder-effect in the bank screening process for a sample of European family firms. Firstly, we find that firms’ founders are significantly associated with a larger request for information during the screening stage. Secondly, founders are more likely to be required for both hard and soft information, whereas nonfamily CEOs are required to provide mostly hard data. Finally, the probability of being subject to deeper and more intense screening procedure is found to increase as founders get close to their retirement age, confirming banks’ concerns for founders’ succession in family firms.

Keywords: Screening technologies; Soft information; Relationship lending; Founder effect; Family firm (search for similar items in EconPapers)
JEL-codes: D22 G21 G32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:20:y:2017:i:c:p:229-237

DOI: 10.1016/j.frl.2016.10.004

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