Hardening soft information: does organizational distance matter?

A large literature has developed on the distinction between hard and soft information with much of this focused displacement information. We investigate whether propensity loan officers at local branches to incorporate in credit scoring process is affected by geographical distance branch bank’s headquarters. find that hardening significantly sensitive branch-to-headquarters distance. also organizational affects time for approval, increasing approval applicants receiving a good score (i.e. low probability default) originated distant reducing poor scores high default). Finally, we average no direct impact likelihood occurrence negative events. However, final rating being equal, an influence performance varies Overall, our findings are consistent presence spatially based communication frictions within banking organizations.