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Loan Officers and Relationship Lending to SMEs

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Author Info
Hirofumi Uchida () (Wakayama University, Faculty of Economics)
Gregory F. Udell () (Kelly School of Business, Indiana University)
Nobuyoshi Yamori () (Nagoya University, Graduate School of Economics)

Additional information is available for the following registered author(s):

Abstract

Previous research suggests that loan officers play a critical role in relationship lending by producing soft information about SMEs. For the first time, we empirically confirm this hypothesis. We also examine whether the role of loan officers differs from small to large banks as predicted by Stein (2002). While we find that small banks produce more soft information, the capacity and manner in which loan officers produce soft information does not seem to differ between large and small banks. This suggests that, although large banks may produce more soft information, they likely tend to concentrate their resources on transactions lending.

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File URL: http://dea2.univpm.it/quaderni/pdfmofir/Mofir016.pdf
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File Function: First version, 2009
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Publisher Info
Paper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economics in its series Mo.Fi.R. Working Papers with number 16.

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Length: 38
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:anc:wmofir:16

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Web page: http://www.mofir.univpm.it/

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Related research
Keywords: Relationship lending; Small- and medium-sized enterprises; hierarchical organizations; soft information;

Other versions of this item:

Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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References listed on IDEAS
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    Other versions:
  7. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
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  8. Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March. [Downloadable!] (restricted)
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    Other versions:
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