Concentration, Hold-up, and Information Revelation in Bank Lending: Evidence From Chilean Firms
In: Banking Market Structure and Monetary Policy
In this paper we empirically study bank-client relationships using a sample of Chilean manufacturing firms. We examine whether concentration and the duration of bank-firm relationships affect the volume of bank lending. Our results indicate that lower concentration, measured by the number of banks a firm borrows from, is associated with a large and positive effect on borrowing. The length of borrower-lender relationships has a positive -although not always statistically significant- effect on the amount borrowed.
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|This chapter was published in: Luis Antonio Ahumada & J. Rodrigo Fuentes & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.) Banking Market Structure and Monetary Policy, , chapter 7, pages 211-240, 2004.|
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