Knowledge sharing and exchange of information within bank and firm networks: the role of the intangibles on the access to credit

The purpose of this paper is to theoretically develop the idea that the intangible value of the collaboration between firms and the banking system can influence the probability of default (PD) on the part of firms and, therefore, their rating. The authors also propose that collaboration between banks and firms has a positive effect not only on the access to credit but also on the innovation activities and on the intervention of foreign capital in the ownership of Italian businesses.

As pointed out by the literature on smaller businesses finance, investments widely rely on credit availability. Tests using data on a sample investigation involving 5,587 firms, operating in 17 manufacturing sectors in Italy, support the majority of the proposed ideas.

The empirical investigation shows that only some aspects of the collaboration between enterprises and banks influence the PD, the investments in R&D and the internationalisation of ownership of the enterprises. In particular, the three stated variables are positively influenced both by the intensity of the credit relationship and by the level of information exchange with the credit system.

Further development of this research, as more empirical data become available, should allow explaining why the level of information exchange with the credit system has the greatest influence on the dependent variables analyzed.

This paper aims to extend the current understanding on how the local banking system is developed and is able to increase access to credit after gathering all the information about firms asking for funds.