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Do Small Banks have an Advantage in Lending? An Examination of Risk-Adjusted Yields on Business Loans at Large and Small Banks

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  • David Carter
  • James McNulty
  • James Verbrugge
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    File URL: http://hdl.handle.net/10.1023/B:FINA.0000020663.21079.d2
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    Bibliographic Info

    Article provided by Springer in its journal Journal of Financial Services Research.

    Volume (Year): 25 (2004)
    Issue (Month): 2 (April)
    Pages: 233-252

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    Handle: RePEc:kap:jfsres:v:25:y:2004:i:2:p:233-252

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    Web page: http://www.springerlink.com/link.asp?id=102934

    Related research

    Keywords: Banks; intermediation; small business lending;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Allen N. Berger & Leora F. Klapper & Gegory F. Udell, 2001. "The ability of banks to lend to informationally opaque small businesses," Proceedings 709, Federal Reserve Bank of Chicago.
    2. Mitchell A. Petersen & Raghuram G. Rajan, 1994. "The Effect of Credit Market Competition on Lending Relationships," NBER Working Papers 4921, National Bureau of Economic Research, Inc.
    3. Gilbert, R Alton, 1984. "Bank Market Structure and Competition: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 16(4), pages 617-44, November.
    4. Leonard I. Nakamura, 1993. "Recent research in commercial banking: information and lending," Working Papers 93-24, Federal Reserve Bank of Philadelphia.
    5. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, Econometric Society, vol. 48(4), pages 817-38, May.
    6. Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuran G. Rajan & Jeremy C. Stein, 2002. "Does function follow organizational form? evidence from the lending practices of large and small banks," Proceedings 815, Federal Reserve Bank of Chicago.
    7. Houston, Joel & James, Christopher, 1996. " Bank Information Monopolies and the Mix of Private and Public Debt Claims," Journal of Finance, American Finance Association, American Finance Association, vol. 51(5), pages 1863-89, December.
    8. Slovin, Myron B & Sushka, Marie E & Polonchek, John A, 1993. " The Value of Bank Durability: Borrowers as Bank Stakeholders," Journal of Finance, American Finance Association, American Finance Association, vol. 48(1), pages 247-66, March.
    9. Allen N. Berger & Anthony Saunders & Joseph M. Scalise & Gregory F. Udell, 1997. "The effects of bank mergers and acquisitions on small business lending," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 1997-28, Board of Governors of the Federal Reserve System (U.S.).
    10. Strahan, Philip E. & Weston, James P., 1998. "Small business lending and the changing structure of the banking industry1," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 821-845, August.
    11. Jonathan Scott, 2004. "Small Business and the Value of Community Financial Institutions," Journal of Financial Services Research, Springer, Springer, vol. 25(2), pages 207-230, April.
    12. Keeton, William R., 1995. "Multi-Office Bank Lending To Small Businesses: Some New Evidence," Proceedings: 1995 Regional Committee NC-207, October 16-17, 1995, Kansas City, Missouri, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition 131493, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    13. Philip E. Strahan & James Weston, 1996. "Small business lending and bank consolidation: is there cause for concern?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, Federal Reserve Bank of New York, vol. 2(Mar).
    14. William R. Keeton, 1995. "Multi-office bank lending to small businesses: some new evidence," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 45-57.
    15. Allen N. Berger & Richard J. Rosen & Gregory F. Udell, 2001. "The effect of market size structure on competition: the case of small business lending," Working Paper Series, Federal Reserve Bank of Chicago WP-01-10, Federal Reserve Bank of Chicago.
    16. Loretta J. Mester, 1999. "Banking industry's consolidation: what's a small business to do?," Business Review, Federal Reserve Bank of Philadelphia, issue Jan, pages 3-16.
    17. Blackwell, David W & Winters, Drew B, 1997. "Banking Relationships and the Effect of Monitoring on Loan Pricing," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(2), pages 275-89, Summer.
    18. Allen N.Berger & Lawrence G. Goldberg & Lawrence J. White, 2001. "The Effects of Dynamic Changes in Bank Competition on the Supply of Small Business Credit," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 01-07, New York University, Leonard N. Stern School of Business, Department of Economics.
    19. Lummer, Scott L. & McConnell, John J., 1989. "Further evidence on the bank lending process and the capital-market response to bank loan agreements," Journal of Financial Economics, Elsevier, Elsevier, vol. 25(1), pages 99-122, November.
    20. Degryse, Hans & Van Cayseele, Patrick, 2000. "Relationship Lending within a Bank-Based System: Evidence from European Small Business Data," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 9(1), pages 90-109, January.
    21. Jayaratne, Jith & Wolken, John, 1999. "How important are small banks to small business lending?: New evidence from a survey of small firms," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 427-458, February.
    22. Allen N. Berger & Gregory F. Udell, 2001. "Small business credit availability and relationship lending: the importance of bank organizational structure," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2001-36, Board of Governors of the Federal Reserve System (U.S.).
    23. Boot, Arnoud W. A., 2000. "Relationship Banking: What Do We Know?," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 9(1), pages 7-25, January.
    24. McNulty, James E. & Akhigbe, Aigbe O. & Verbrugge, James A., 2001. "Small bank loan quality in a deregulated environment: the information advantage hypothesis," Journal of Economics and Business, Elsevier, Elsevier, vol. 53(2-3), pages 325-339.
    25. Timothy H. Hannan, 1989. "Foundations of the structure-conduct-performance paradigm," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 83, Board of Governors of the Federal Reserve System (U.S.).
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    Cited by:
    1. de la Torre, Augusto & Martínez Pería, María Soledad & Schmukler, Sergio L., 2010. "Bank involvement with SMEs: Beyond relationship lending," Journal of Banking & Finance, Elsevier, vol. 34(9), pages 2280-2293, September.
    2. Neuberger, Doris & Räthke, Solvig, 2006. "Microenterprises and multiple bank relationships: Evidence from a survey among professionals," Thuenen-Series of Applied Economic Theory 61, University of Rostock, Institute of Economics.
    3. Hirofumi Uchida & Gregory F.Udell & Wako Watanabe, 2007. "Bank Size and Lending Relationships in Japan," NBER Working Papers 13005, National Bureau of Economic Research, Inc.
    4. Carter, David A. & McNulty, James E., 2005. "Deregulation, technological change, and the business-lending performance of large and small banks," Journal of Banking & Finance, Elsevier, vol. 29(5), pages 1113-1130, May.
    5. Wanting Wang, 2012. "The Special Characteristics of American Community Banking," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(2), pages 182-189, April.
    6. Berger, Allen N. & Rosen, Richard J. & Udell, Gregory F., 2005. "Does Market Size Structure Affect Competition? The Case of Small Business Lending," CEI Working Paper Series, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University 2005-8, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    7. Akhigbe, Aigbe & McNulty, James E., 2011. "Bank monitoring, profit efficiency and the commercial lending business model," Journal of Economics and Business, Elsevier, Elsevier, vol. 63(6), pages 531-551.
    8. Diana Bonfim & Qinglei Dai, 2012. "Bank size and lending specialization," Working Papers w201219, Banco de Portugal, Economics and Research Department.
    9. Pietro ALESSANDRINI & Andrea PRESBITERO & Alberto ZAZZARO, 2007. "Bank Size or Distance: What Hampers Innovation Adoption by SMEs ?," Working Papers 304, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    10. Scott, Jonathan A. & Dunkelberg, William C., 2010. "Competition for small firm banking business: Bank actions versus market structure," Journal of Banking & Finance, Elsevier, vol. 34(11), pages 2788-2800, November.
    11. Pietro Alessandrini & Andrea Filippo Presbitero & Alberto Zazzaro, 2008. "Geographical Organization of Banking Systems and Innovation Diffusion," Mo.Fi.R. Working Papers, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences 3, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    12. Ergungor, O. Emre, 2005. "The profitability of bank-borrower relationships," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 14(4), pages 485-512, October.

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