Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319990 
Year of Publication: 
2016
Series/Report no.: 
CASMEF Working Paper Series No. WP 2016/04
Publisher: 
LUISS Guido Carli, Department of Economics and Finance, Arcelli Centre for Monetary and Financial Studies, Rome
Abstract: 
The aim of this paper is to evaluate the contribution of several aspects of the bank-firm relationships in anticipating the corporate default event at least one year before. Using a unique dataset on a sample of 113 co-operative credit banks and about 12,000 firms operating in Italy, between 2012 and 2013, this paper documents that checking accounts and long-term loans activities provide additional explanatory power respect to financial information gathered from balance sheets in predicting the likelihood of default. Estimating a probit model, it finds that overdrafts and usage of credit lines on checking accounts, as well as overdrafts and payments overdue on long-term loans increase the accuracy prediction of default events by about 10%.
Subjects: 
bank-firm relationship
default prediction
probit model
accuracy prediction
JEL: 
G20
G21
G33
Document Type: 
Working Paper

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