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The number of banking relationships and the business cycle: New evidence from Colombia

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  • Gómez-González, José Eduardo
  • Reyes, Nidia Ruth

Abstract

We study the determinants of multiple bank-firm relationships using a uniquely rich data set comprised of information on individual loans of a large number of firms in Colombia. We control for firm-specific variables and find that the business cycle exerts important influence on the number of bank relationships sustained by firms. Our evidence suggests that the number of bank relationships is counter-cyclical, decreasing during macroeconomic expansions and increasing during contractions. However, this effect is stronger for large firms which have more access to alternative sources of funding.

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  • Gómez-González, José Eduardo & Reyes, Nidia Ruth, 2011. "The number of banking relationships and the business cycle: New evidence from Colombia," Economic Systems, Elsevier, vol. 35(3), pages 408-418, September.
    • Handle: RePEc:eee:ecosys:v:35:y:2011:i:3:p:408-418
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    References listed on IDEAS

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    Cited by:

    1. José Eduardo Gómez-González & Nidia Ruth Reyes, 2011. "Firm Failure and Relationship Lending:New Evidence from Small Businesses," Borradores de Economia 638, Banco de la Republica de Colombia.
    2. repec:col:000094:010860 is not listed on IDEAS
    3. Nidia Ruth Reyes & José Eduardo Gómez G. & Jair Ojeda Joya, 2013. "Bank Lending, Risk Taking, and the Transmission of Monetary Policy: New Evidence for Colombia," BORRADORES DE ECONOMIA 010970, BANCO DE LA REPÚBLICA.
    4. Jose Eduardo Gomez-Gonzalez & Nidia Ruth Reyes, 2013. "Firm failure and relationship lending in an emerging economy: new evidence from small businesses," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 6(1), pages 131-145, March.
    5. Nidia Ruth Reyes & José E. Gómez-González & Jair Ojeda-Joya, 2015. "Bank lending, risk taking, and the transmission of monetary policy: new evidence for an emerging economy," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 8(1-2), pages 67-80, July.

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