Multiple bank lending relationships in Italy: their determinants and the role of firms’ governance features

The aim of this paper is to analyze the determinants of multiple-bank lending - one of the main features of the bank-firm relationships in Italy. The analysis suggests that multiple bank lending is significantly and importantly linked with firms’ governance characteristics. In particular, it emerges that firms adopting a less formalised model of governance - which could denote lower informational transparency or, more in general, lesser degree of protection of third creditors - are characterised by a greater level of multiple-bank lending. In this respect multiple-bank lending may be the consequence of a risk averse attitude of banks and thus constitutes a sort of insurance mechanisms whereby banks overcome difficulties in assessing their customer firms.