Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319955 
Year of Publication: 
2012
Series/Report no.: 
CASMEF Working Paper Series No. WP 2012/12
Publisher: 
LUISS Guido Carli, Department of Economics and Business, Arcelli Centre for Monetary and Financial Studies, Rome
Abstract: 
This paper investigates SME financing in Italy. The literature distinguishes between two main different lending technologies (LTs) for SMEs: transactional and relationship LTs. We find that banks lend to SMEs by using both LTs together, independently of the size and proximity of borrowers. Moreover, we show that when soft information is taken into account in transactional (relationship) lending it increases (decreases) the probability of firms being credit rationed. These results support the view that LTs can be complementary, but reject the hypothesis that substitutability among LTs is somehow possible for outsiders by means of hardening of soft information.
Subjects: 
Lending technologies
bank-firm relationship
soft information
hard information
small business finance
JEL: 
G21
G30
O16
Document Type: 
Working Paper

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