Relational capital in lending relationships: evidence from European family firms
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The aim of this paper is to investigate the role of family CEOs’ relational capital and non-family CEOs’ managerial skills in the context of bank relationships for a large sample of small- and medium-sized European firms. The results indicate that family firms appointing family managers are significantly more likely to maintain soft-information-based and longer-lasting lending relationships than family firms managed by professionals, and that these closer bank-firm ties reduce the likelihood of experiencing credit restrictions. Moreover, we find that having professional CEOs does not directly affect the probability of being credit rationed. Hence, family relational capital appears to have a univocal beneficial impact on bank-firm relationships.
KeywordsFamily firm Family CEO Soft information Relational capital Relationship lending Credit rationing
JEL codesD22 G21 G22
We are grateful to two anonymous referees for helpful comments and suggestions. We are also grateful for the comments of Stefania Cosci, Rocco Ciciretti, Riccardo Lucchetti, Pierluigi Murro, Tommaso Oliviero and participants at the XXIV Conference on Money, Banking and Finance (Rome, Italy), the 3rd CERBE Workshop (Rome, Italy) and seminar held at the University of Rome Tor Vergata.
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