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Do Lending Relationships Matter? Evidence from Bank Survey Data in Germany

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  • Erik Lehmann

    ()
    (Center of Finance and Econometrics)

  • Neuberger, Doris

    (University of Rostock)

Abstract

Strong lending relationships between banks and small and medium-sized enterprises (SMEs) play a key role in the bank-based financial system of Germany. So far, they have been mainly described by the notion of a housebank and transactional features of long-term bank-customer relationships. In contrast, the present paper also considers interactional variables which try to measure social relations between loan officer and firm manager. Using bank survey data, the relationship and interaction variables prove to affect loan prices, collateral requirements and credit availability.

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Paper provided by Center of Finance and Econometrics, University of Konstanz in its series CoFE Discussion Paper with number 00-04.

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Length: 33 Pages
Date of creation: Jan 2000
Date of revision:
Handle: RePEc:knz:cofedp:0004

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