Substitution or complementarity between Information “soft” and information “hard”: why and which effect on bank profitability?
AbstractThe 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.
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Date of creation: 25 Jun 2010
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Basel directives; “soft” information; “hard” information; credit decision-making process; bank performance; Bank-SMEs relationship.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-02 (All new papers)
- NEP-BAN-2011-04-02 (Banking)
- NEP-CTA-2011-04-02 (Contract Theory & Applications)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jalal Akhavein & W. Scott Frame & Lawrence J. White, 2001.
"The Diffusion of Financial Innovations: An Examination of the Adoption of Small Business Credit Scoring By Large Banking Organizations,"
01-08, New York University, Leonard N. Stern School of Business, Department of Economics.
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- Jalal Akhavein & W. Scott Frame & Lawrence J. White, 2001. "The Diffusion of Financial Innovations: An Examination of The Adoption of Small Business Credit Scoring by Large Banking Organizations," Center for Financial Institutions Working Papers 01-19, Wharton School Center for Financial Institutions, University of Pennsylvania.
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