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

Giovanni Ferri, Pierluigi Murro and Marco Pini

Global Finance Journal, 2020, vol. 43, issue C

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.

Keywords: Family firms; Firm-bank relationships; Bank lending technologies; Credit rationing (search for similar items in EconPapers)
JEL-codes: D22 G32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Credit Rationing and the Relationship Between Family Businesses and Banks in Italy (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:43:y:2020:i:c:s1044028317304660

DOI: 10.1016/j.gfj.2018.04.003

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