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The Value of Relationship Lending: Small Banks in an Era of Consolidation

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Author Info
Paola Bongini
Maria Luisa Di Battista
Emma Zavarrone
Abstract

Consolidation in the banking industry has caused concern about the survival of small banks. Empirical evidence, however, shows that small banks are performing better than larger banks in terms of loan growth and profitability. This paper investigates the determinants of such unexpected superior performance; in particular we posit that peculiarities of small banks, like their ability to lever on relationship lending, are good explanatory variables of their recent loan growth. Copyright 2007 The Author Journal compilation 2007 Banca Monte dei Paschi di Siena SpA

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Article provided by Banca Monte dei Paschi di Siena SpA in its journal Economic Notes.

Volume (Year): 36 (2007)
Issue (Month): 3 (November)
Pages: 209-230
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Handle: RePEc:bla:ecnote:v:36:y:2007:i:3:p:209-230

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This page was last updated on 2009-10-25.


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