Lending technologies in Italy: an example of hardening soft information?

We study the firm-main bank relationship in a large sample of Italy’s manufacturing enterprises. Our results show that the same firm tends to receive credit via different lending technologies. This complementarity across technologies may have an information basis, because the use of soft information is crucial for each lending technology. This supports the hardening-of-soft-information view, whereby also transactional lenders might somehow use difficult to codify qualitative information – traditionally believed a prerogative of relational banks – on borrowing enterprises.