Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229122
Authors: 
Ongena, Steven
Pinoli, Sara
Rossi, Paola
Scopelliti, Alessandro Diego
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2508
Abstract: 
We study the effects of the diversification of funding sources on the financing conditions for firms. We exploit a regulatory reform which took place in Italy in 2012, i.e., the introduction of "minibonds", which opened a new market-based funding opportunity for unlisted firms. Using the Italian Credit Register, we investigate the impact of minibond issuance on bank credit conditions for issuer firms, both at the firm-bank and firm level. We compare new loans granted to issuer firms with new loans concurrently granted to similar non-issuer firms. We find that issuer firms obtain lower interest rates on bank loans of the same maturity than non-issuer firms, suggesting an improvement in their bargaining power with banks. In addition, issuer firms reduce the amount of used bank credit but increase the overall amount of available external funds, pointing to a substitution with bank credit and to a diversification of corporate funding sources. Studying their ex-post performance, we find that issuer firms expand their total assets and fixed assets, and also raise their leverage.
Subjects: 
bank credit
capital markets
minibonds
loan pricing
SME finance
JEL: 
G21
G23
G32
G38
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4454-0
Document Type: 
Working Paper

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