Beyond Banks’ Capitalization: What Affects the Credit Lines?

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.