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Bankruptcies of small firms and lending relationship

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  • Shimizu, Katsutoshi
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    Abstract

    This paper empirically investigates the role played by relatively small banks in the Japanese local credit market. We test the hypothesis that small banks enhance the recovery rate from the financial distress and reduce the bankruptcy ratio of small firms. Empirical evidence suggests that small banks specialize more in relationship loans to small firms. However, this expertise is limited to the loans to unincorporated firms or those with a very small number of employees.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 36 (2012)
    Issue (Month): 3 ()
    Pages: 857-870

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    Handle: RePEc:eee:jbfina:v:36:y:2012:i:3:p:857-870

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    Web page: http://www.elsevier.com/locate/jbf

    Related research

    Keywords: Lending relationship; Japanese banks; Nonperforming loans; Bankruptcy; Small business; Credit union;

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