Predictive Strength of Lending Technologies in Funding SMEs
| Autor: | Caterina Lucarelli, Paola Brighi, Valeria Venturelli |
|---|---|
| Přispěvatelé: | Brighi, Paola, Lucarelli, Caterina, Venturelli, Valeria |
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
Finance
Adverse selection business.industry Strategy and Management 05 social sciences SMEs funding General Business Management and Accounting Dilemma Strategy and Management1409 Tourism Leisure and Hospitality Management Relationship lending Management of Technology and Innovation 0502 economics and business Soft and hard information Business Management and Accounting (all) 050211 marketing business Lending technologies 050203 business & management |
| Popis: | Using a proprietary database of lending decisions (N=9,898) for small and medium-sized enterprises (SMEs), the paper investigates how banks cope with the adverse selection dilemma. Based on an intertemporal framework, we qualify incorrect and correct lending decisions of banks and investigate the power of lending technologies to predict errors and correct choices. Findings suggest that adverse selection can be better controlled by a durable bank-firm relationship, as well as by an atomistic loan decision process, at the local level. By contrast, a loan decision-making process based exclusively on hard financial information about SMEs may lead to adverse selection errors. |
| Databáze: | OpenAIRE |
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