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Should I Stay or Should I Go? Firms’ Mobility Across Banks in the Aftermath of the Financial Crisis

Author

Listed:
  • Davide Arnaudo

    (Regional Economic Research Unit)

  • Giacinto Micucci

    (Regional Economic Research Unit)

  • Massimiliano Rigon

    (Regional Economic Research Unit)

  • Paola Rossi

    (Regional Economic Research Unit)

Abstract

We show that the creation of new bank relationships was effective to ease the credit constraints of firms in the aftermath of the 2008–09 financial crisis: firms that started new bank relationships were able to maintain or even increase their outstanding loans. These firms were generally larger and better performers (higher profitability, investments and growth improved the possibility to start new credit relationships). On the opposite, access to new credit lines was more difficult for small and more opaque firms, for which a long-term relationship with their main bank has been the most effective way to mitigate financing constraints. Finally, geographical proximity matters for bank relationships: the closer the firms are to the lending banks, the lower is the probability of closing a credit relationship and the higher of starting a new one.

Suggested Citation

  • Davide Arnaudo & Giacinto Micucci & Massimiliano Rigon & Paola Rossi, 2019. "Should I Stay or Should I Go? Firms’ Mobility Across Banks in the Aftermath of the Financial Crisis," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(1), pages 17-37, March.
    • Handle: RePEc:spr:italej:v:5:y:2019:i:1:d:10.1007_s40797-018-0081-7
    DOI: 10.1007/s40797-018-0081-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial crisis; Mobility in the credit market; Relationship lending;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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