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Beyond Banks¡¯ Capitalization: What Affects the Credit Lines?

Author

Listed:
  • Carmen Gallucci
  • Vincenzo Formisano
  • Michele Modina
  • Rosalia Santulli

Abstract

The present paper aims at investigating what affects the credit granting beyond banks¡¯capitalization. It focuses on public and private firms¡¯ information available for the banks. We apply moderating regression models on panel data. Our sample is of 123 co-operative credit banks and more than 11,000 firms operating in Italy between 2012 and 2014, for 18,143 observations. Our main findings suggest that firms¡¯ profitability (public information) positively moderates the direct relationship between banks¡¯ capitalization and credit grants; differently, multiple banking, overdue payment and credit limit violation days (private information) negatively moderate the above-cited relationship. Finally, the conjoint moderating effect of public and private information proves to be negative, thus also firms with a good profitability are penalized in credit grant whether they do not take care the relationship with banks.

Suggested Citation

  • Carmen Gallucci & Vincenzo Formisano & Michele Modina & Rosalia Santulli, 2017. "Beyond Banks¡¯ Capitalization: What Affects the Credit Lines?," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 8(4), pages 71-79, October.
  • Handle: RePEc:jfr:ijfr11:v:8:y:2017:i:4:p:71-79
    DOI: 10.5430/ijfr.v8n4p71
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    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/12240/7506
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    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/12240
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    References listed on IDEAS

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