Reduction in information asymmetry and credit access for small and medium-sized enterprises

Andrea Moro, Matthias Fink, Daniela Maresch

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

We examine the relation between the quality, quantity, completeness, and timeliness of the information loan managers obtain from small and medium-sized enterprises (SMEs) and the amount of short-term credit provided to them by looking at 828 loan-manager-SME relationships in Italy. The result suggests that a reduction in information asymmetry is associated with a greater amount of credit. Moreover, the reduction in information asymmetry has a relevant economic impact on the amount of short-term credit obtained: the amount of credit provided increases by 12% when asymmetry reduces by one notch. Our results are robust to alternative specifications and to endogeneity.

Original languageEnglish
JournalJournal of Financial Research
Volume38
Issue number1
Pages (from-to)121-143
Number of pages23
ISSN0270-2592
DOIs
Publication statusPublished - 2015
Externally publishedYes

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Access to credit
Information asymmetry
Credit
Small and medium-sized enterprises
Managers
Loans
Completeness
Timeliness
Endogeneity
Asymmetry
Economic impact
Italy

Cite this

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title = "Reduction in information asymmetry and credit access for small and medium-sized enterprises",
abstract = "We examine the relation between the quality, quantity, completeness, and timeliness of the information loan managers obtain from small and medium-sized enterprises (SMEs) and the amount of short-term credit provided to them by looking at 828 loan-manager-SME relationships in Italy. The result suggests that a reduction in information asymmetry is associated with a greater amount of credit. Moreover, the reduction in information asymmetry has a relevant economic impact on the amount of short-term credit obtained: the amount of credit provided increases by 12{\%} when asymmetry reduces by one notch. Our results are robust to alternative specifications and to endogeneity.",
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Reduction in information asymmetry and credit access for small and medium-sized enterprises. / Moro, Andrea; Fink, Matthias; Maresch, Daniela.

In: Journal of Financial Research, Vol. 38, No. 1, 2015, p. 121-143.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Reduction in information asymmetry and credit access for small and medium-sized enterprises

AU - Moro, Andrea

AU - Fink, Matthias

AU - Maresch, Daniela

PY - 2015

Y1 - 2015

N2 - We examine the relation between the quality, quantity, completeness, and timeliness of the information loan managers obtain from small and medium-sized enterprises (SMEs) and the amount of short-term credit provided to them by looking at 828 loan-manager-SME relationships in Italy. The result suggests that a reduction in information asymmetry is associated with a greater amount of credit. Moreover, the reduction in information asymmetry has a relevant economic impact on the amount of short-term credit obtained: the amount of credit provided increases by 12% when asymmetry reduces by one notch. Our results are robust to alternative specifications and to endogeneity.

AB - We examine the relation between the quality, quantity, completeness, and timeliness of the information loan managers obtain from small and medium-sized enterprises (SMEs) and the amount of short-term credit provided to them by looking at 828 loan-manager-SME relationships in Italy. The result suggests that a reduction in information asymmetry is associated with a greater amount of credit. Moreover, the reduction in information asymmetry has a relevant economic impact on the amount of short-term credit obtained: the amount of credit provided increases by 12% when asymmetry reduces by one notch. Our results are robust to alternative specifications and to endogeneity.

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DO - 10.1111/jfir.12054

M3 - Journal article

AN - SCOPUS:84925296595

VL - 38

SP - 121

EP - 143

JO - Journal of Financial Research

JF - Journal of Financial Research

SN - 0270-2592

IS - 1

ER -