{"id":4442,"date":"2024-04-12T13:15:15","date_gmt":"2024-04-12T11:15:15","guid":{"rendered":"https:\/\/bifelab.com\/?post_type=avada_portfolio&#038;p=4442"},"modified":"2024-04-17T11:31:17","modified_gmt":"2024-04-17T09:31:17","slug":"predicting-smes-default-risk-evidence-from-bank-firm-relationship-data-3-2","status":"publish","type":"avada_portfolio","link":"https:\/\/bifelab.com\/en\/area-di-ricerca\/predicting-smes-default-risk-evidence-from-bank-firm-relationship-data-3-2\/","title":{"rendered":"Predicting SMEs\u2019 default risk: Evidence from bank-firm relationship data"},"content":{"rendered":"<p><strong>ABSTRACT<\/strong><\/p>\n<p style=\"text-align: justify;\">This paper uses a probit model on a unique dataset of 13,081 Italian firms and 111 co-operative banks involved in the lending process to provide empirical evidence suggesting that the use and violations of credit lines and long-term loan overruns predict one-year and two-year probability of default (PD). The analysis controls for balance sheet indicators and time varying bank characteristics, captured by bank-time fixed effects. When combined with accounting data, credit-related indicators obtained from private internal banking sources improve small and medium-sized enterprises\u2019 (SMEs) default prediction. The marginal benefit of the bank-firm specific information is also assessed by comparing the default prediction accuracy of a model that incorporates accounting information with that of a full model including private information. In terms of heterogeneity, the association between the balance sheet indicators and data on bank-firm relationships and default probability can vary across sectors and geographies. This highlights the importance for banks of specific analysis to better assess risk at the firm level<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cite: Modina, M., Pietrovito, F., Gallucci, C., &#038; Formisano, V. (2023). Predicting SMEs\u2019 default risk: Evidence from bank-firm relationship data. The Quarterly Review of Economics and Finance, 89, 254\u2013268. https:\/\/doi.org\/10.1016\/j.qref.2023.04.008<\/p>\n","protected":false},"author":5,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"footnotes":""},"portfolio_category":[101,105,100],"portfolio_skills":[],"portfolio_tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Predicting SMEs\u2019 default risk: Evidence from bank-firm relationship data - BifeLab<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bifelab.com\/en\/area-di-ricerca\/predicting-smes-default-risk-evidence-from-bank-firm-relationship-data-3-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Predicting SMEs\u2019 default risk: Evidence from bank-firm relationship data - BifeLab\" \/>\n<meta property=\"og:description\" content=\"Cite: Modina, M., Pietrovito, F., Gallucci, C., &amp; Formisano, V. (2023). Predicting SMEs\u2019 default risk: Evidence from bank-firm relationship data. 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