IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v62y2016i1p90-110.html
   My bibliography  Save this article

The Benefits of Relationship Lending in a Cross-Country Context: A Meta-Analysis

Author

Listed:
  • Vlado Kysucky

    () (Shenzhen University International Business School, Shenzhen 518060, China)

  • Lars Norden

    () (Brazilian School of Public and Business Administration, Getulio Vargas Foundation, 22250-900 Rio de Janeiro, Brazil)

Abstract

Relationship lending may create benefits for borrowers by reducing information asymmetries. However, empirical evidence is mixed. We conduct a meta-analysis to summarize and explain the heterogeneity in the results in the literature using hand-collected information from 101 studies in the United States, Europe, Asia, and Latin America from 1970 to 2010. We find that strong relationships are generally beneficial for borrowers, but lending outcomes differ across the relationships’ dimensions. Long-lasting, exclusive, and synergy-creating bank relationships are associated with higher credit volume and lower loan rates. These benefits are more likely in the United States and in countries where bank competition is high. They are not related to the importance of small and medium-sized enterprises in an economy, suggesting that prevalence of relationship lending does not necessarily come along with borrower benefits. Our inferences are robust when we control for observed systematic heterogeneity in the original studies and hold in a bootstrapping analysis.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2014.2088 . This paper was accepted by Wei Jiang, finance .

Suggested Citation

  • Vlado Kysucky & Lars Norden, 2016. "The Benefits of Relationship Lending in a Cross-Country Context: A Meta-Analysis," Management Science, INFORMS, vol. 62(1), pages 90-110, January.
  • Handle: RePEc:inm:ormnsc:v:62:y:2016:i:1:p:90-110
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2014.2088
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:jfinin:v:31:y:2017:i:c:p:16-29 is not listed on IDEAS
    2. Martin Brown & Matthias Hoffmann, 2016. "Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 152(I), pages 23-48, March.
    3. Fungáčová, Zuzana & Shamshur, Anastasiya & Weill, Laurent, 2017. "Does bank competition reduce cost of credit? Cross-country evidence from Europe," Journal of Banking & Finance, Elsevier, vol. 83(C), pages 104-120.
    4. repec:spr:cejnor:v:26:y:2018:i:1:d:10.1007_s10100-017-0484-9 is not listed on IDEAS
    5. repec:spr:sjecst:v:152:y:2016:i:1:d:10.1007_bf03399421 is not listed on IDEAS
    6. de Haas, Ralph & Lu, Liping & Ongena, S.R.G., 2018. "Clear and Close Competitors? : On the Causes and Consequences of Bilateral Competition between Banks," Discussion Paper 2018-027, Tilburg University, Center for Economic Research.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:62:y:2016:i:1:p:90-110. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: http://edirc.repec.org/data/inforea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.