Differentiated use of small business credit scoring by relationship lenders and transactional lenders: Evidence from firm–bank matched data in Japan

Arito Ono, Ryo Hasumi and Hideaki Hirata ()

Journal of Banking & Finance, 2014, vol. 42, issue C, 371-380

Abstract: This paper examines the ex-post performance of small and medium enterprises (SMEs) that obtained small business credit scoring (SBCS) loans, using a unique Japanese firm–bank matched dataset. The ex-post probability of default after the SBCS loan was provided significantly increased for SMEs that obtained an SBCS loan from a transactional lender. Also, the lending attitude of relationship lenders during the recent global financial crisis was more severe if a firm had received an SBCS loan from a transactional lender. These findings suggest that SBCS loans by transactional lenders are more prone to type II errors and detrimental to relationship lenders’ incentive to provide “liquidity insurance.”

Keywords: Small business credit scoring; Lending technology; Relationship lending (search for similar items in EconPapers)
JEL-codes: G21 G32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Differentiated Use of Small Business Credit Scoring by Relationship Lenders and Transactional Lenders: Evidence from Firm-Bank Matched Data in Japan (2012)
Working Paper: Differentiated Use of Small Business Credit Scoring by Relationship Lenders and Transactional Lenders: Evidence from firm-bank matched data in Japan (2011)
Working Paper: Differentiated Use of Small Business Credit Scoring by Relationship Lenders and Transactional Lenders: Evidence from Firm?Bank Matched Data in Japan
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:42:y:2014:i:c:p:371-380

DOI: 10.1016/j.jbankfin.2014.02.009

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