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The number of bank relationships and bank lending to informationally opaque SMEs

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  • Ogane, Yuta

Abstract

This paper examines how the number of bank relationships affects bank lending to informationally opaque firms using a unique firm-level dataset of 996 small and medium-sized enterprises (SMEs). We find that an increase in the number of bank relationships can increase bank lending to informationally opaque SMEs. We also find that this increase is prominently observed in long-term loans. Furthermore, these loans can gradually increase with the number of bank relationships. These findings suggest that such a number can serve as a quality sign of informationally opaque SMEs and increase bank lending to them.

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  • Ogane, Yuta, 2023. "The number of bank relationships and bank lending to informationally opaque SMEs," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:pacfin:v:80:y:2023:i:c:s0927538x23001488
    DOI: 10.1016/j.pacfin.2023.102082
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    More about this item

    Keywords

    Bank relationships; Bank lending; Informationally opaque firms; Small and medium-sized enterprises;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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