Empirical Evidence on the Duration of Bank Relationships
AbstractWe present evidence on the duration of firm-bank relationships using a unique panel data set of connections between Oslo Stock Exchange-listed firms and their banks for the period 1979-1994. We focus on the determinants of the duration of a relationship and the causes for ending an existing bank relationship. We find that duration itself does not greatly influence the likelihood of ending a relationship: short-lived relationships are as likely to end as long-lived relationships. We also find firms that maintain simultaneous multiple-bank relationships are more likely to end a bank relationship than a single-bank firm and that small, highly-leveraged "growth" firms are more likely to end a bank relationship than large, low-leveraged "value" firms.
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Bibliographic InfoPaper provided by Wharton School Center for Financial Institutions, University of Pennsylvania in its series Center for Financial Institutions Working Papers with number 97-15.
Date of creation: Mar 1997
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Web page: http://fic.wharton.upenn.edu/fic/
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banking relationships; hazard models; duration analysis JEL Codes: G21; C41;
Other versions of this item:
- Steven Ongena & David C. Smith, 1997. "Empirical Evidence on the Duration of Bank Relationships," Finance 9703002, EconWPA.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
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