Resource title

Number of bank relationships: an indicator of competition, borrower quality, or just size?

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image for OpenScout resource :: Number of bank relationships: an indicator of competition, borrower quality, or just size?

Resource description

In this study the firms choice of the number of bank relationships is analyzed with respect to influential factors like borrower quality, size and the existence of a close housebank relationship. Then, the number of bank relationships is used as a proxy to examine if bank competition is reflected in loan terms. It is shown that the number of bank relationships is foremost determined by borrower size and the existence of a housebank relationship. Loan rate spreads are not effected by the number of bank relationships. However, borrowers with a small number of bank relationships provide more collateral and get more credit. These effects are amplified by a housebank relationship. Housebanks get more collateral and are ready to take a larger stake in the financing of their customers.

Resource author

Achim Machauer, Martin Weber

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25370

Resource license

Adapt according to the presented license agreement and reference the original author.