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Bank-firm relationships and the survival of non-financial firms during the financial crisis 2008-2009

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  • Abildgren, Kim
  • Vølund Buchholst, Birgitte
  • Staghøj, Jonas

Abstract

Utilising a unique data set with annual accounts from around 37,000 Danish non-financial firms spanning almost one and a half decade, we offer microeconometric evidence on bankfirm relationships and the survival of firms during the financial crisis 2008-9. Within the framework of accounting-based credit-scoring models we find that the probability of default during the crisis was significantly higher for firms with a “weak” bank than for comparable firms with a “sound” bank– even after controlling for differences in the credit quality of firms. We discuss how to interpret these results in relation to the real effects of financial crisis. JEL Classification: E44, G21, G33

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Bibliographic Info

Paper provided by European Central Bank in its series Working Paper Series with number 1516.

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Date of creation: Feb 2013
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Handle: RePEc:ecb:ecbwps:20131516

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Keywords: bank-firm relationships; financial crisis; firm survival; probability of default;

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