The value of hard business credit information fully mirrors
the results for the previous regression models, in which we included all four attributes of business credit information (columns
(1) and (2)). Put differently, the hard business credit information
is the key factor that drives our previous results. This finding has
an interesting parallel to the recent research on sources of private information in banking (e.g., Mester et al., 2007; Norden
and Weber, 2010). Related studies document that proprietary
information on credit line usage and checking account activity
help banks better predict borrower defaults and manage their
credit relationships with firms. Norden and Weber (2010) show
that these benefits are most pronounced in the case of SMEs
and individuals but rather weak for large firms. That result is
consistent with our finding on the importance of hard business
credit information, which initially was private information of
the firm, its supplier, and their banks before it was shared with
others through the credit bureau. We find a positive impact of
FIRMS_PER_EMPLOYEE on the value of hard business credit
information in model (2).