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Lending Relationships in Germany: Empirical Results from Survey Data Author info | Abstract | Publisher info | Download info | Related research | Statistics Harhoff, Dietmar
Körting, Timm
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We examine empirically the role of lending relationships in determining the collateral requirements, costs and availability of external funding. The data originates from a recently concluded survey of small- and medium-sized German firms. In our descriptive analysis, we explore the borrowing patterns and the concentration of borrowing from financial institutions. Using data on line of credit (L/C) interest rates, collateral requirements, and the firms’ use of fast payment discounts we find that relationship variables may have some bearing on the price of external funds, but much more so on loan collateralization and availability. Firms in financial distress face comparatively high L/C interest rates and reduced credit availability.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
1917.
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Date of creation: Jun 1998Date of revision:
Handle: RePEc:cpr:ceprdp:1917Contact details of provider: Postal: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG Phone: 44 - 20 - 7183 8801 Fax: 44 - 20 - 7183 8820
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Keywords: Credit Rationing ; Financial Intermediation ; Lending relationships ; Other versions of this item:
Find related papers by JEL classification: D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
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