Substitution or complementarity between “soft” information and “hard” information: why and which effect on bank profitability?

Hervé Alexandre () and Aymen Smondel ()
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Aymen Smondel: IAE Nice - Institut d'Administration des Entreprises - Nice - UNS - Université Nice Sophia Antipolis (1965 - 2019) - UniCA - Université Côte d'Azur

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Abstract: The Basel II committee set up directives encouraging banks to use internal scores in order to assess the risk of their customers. This new form of information competes with the existing ones. SMEs are most concerned by these new stakes, due to the lack of transparency. The aim of this paper is to understand the determinants of the choice between substitution and complementarity between the two types of information: "soft" and "hard", to test a potential effect of this choice on the banking performance and to describe which variables are involved in the decision-making process. The originality of this work is to try to quantify the information costs and to use it as a variable which is affecting the adopted choice.

Keywords: Basel directives; Bank-SMEs relationship; bank performance; credit decision-making process; hard information; soft information (search for similar items in EconPapers)
Date: 2010-05
Note: View the original document on HAL open archive server: https://hal.science/hal-01622844v1
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Published in 27th AFFI 2010, May 2010, Saint-Malo, France. pp.39

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Working Paper: Substitution or complementarity between “soft” information and "hard" information: why and which effect on bank profitability ? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01622844

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