Bank screening technologies and the founder effect. Evidence from European lending relationships

This article provides evidence on the existence of a founder-effect in the bank screening process for a sample of European family firms. Firstly, we find that firms’ founders are sig- nificantly associated with a larger request for information during the screening stage. Sec- ondly, founders are more likely to be required for both hard and soft information, whereas nonfamily CEOs are required to provide mostly hard data. Finally, the probability of being subject to deeper and more intense screening procedure is found to increase as founders get close to their retirement age, confirming banks’ concerns for founders’ succession in family firms.