How does relationship banking influence credit financing? Evidence from the financial crisis
AbstractDuring the financial crisis asymmetric information in credit markets became moresevere. Did relationship banking help firms to avoid impaired credit financing andwhich credit financing problems did relationship banking help to circumvent? We usesurvey data for 1,139 German firms to analyze how relationship banking works. Wefind that it lowers the probability of higher information requirements from banks. Itdoes not, however, help to avoid constrained availability of bank credit. If credit isgranted, relationship banking makes deteriorated non-price contract terms (i.e. collateraland maturity) less likely. Its impact on interest rates is ambiguous.
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Bibliographic InfoPaper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 157.
Date of creation: 2013
Date of revision:
Credit financing; relationship banking; financial crisis; access to credit;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G01 - Financial Economics - - General - - - Financial Crises
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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