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Models of Bank Financing of Czech Corporations and Credit Risk

In: CNB Financial Stability Report 2008/2009

Author

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  • Adam Gersl
  • Petr Jakubik

Abstract

This article presents the results of an analysis of data on individual bank loans of non-financial corporations in the Czech Republic taken from the CNB’s Central Register of Credits. It focuses on the question of how firms obtain financing from domestic banks. The results show that the vast majority of non-financial corporations use the services of just one relationship lender. Small and young firms in technology- and knowledge-intensive industries tend to concentrate their credit needs in a single bank, whereas less creditworthy firms and firms in cyclical industries tend to borrow from more than one bank. It also turns out that the level of credit risk at bank level decreases in line with the extent to which firms applying single relationship banking occur in the bank’s portfolio.

Suggested Citation

  • Adam Gersl & Petr Jakubik, 2009. "Models of Bank Financing of Czech Corporations and Credit Risk," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2008/2009, chapter 0, pages 92-101, Czech National Bank, Research and Statistics Department.
    • Handle: RePEc:cnb:ocpubc:fsr0809/3
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    File URL: https://www.cnb.cz/en/financial-stability/thematic-articles-on-financial-stability/
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    References listed on IDEAS

    as
    1. Elsas, Ralf & Krahnen, Jan Pieter, 1998. "Is relationship lending special? Evidence from credit-file data in Germany," Journal of Banking & Finance, Elsevier, vol. 22(10-11), pages 1283-1316, October.
    2. Bolton, Patrick & Scharfstein, David S, 1996. "Optimal Debt Structure and the Number of Creditors," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 1-25, February.
    3. Gorton, Gary & Schmid, Frank A., 2000. "Universal banking and the performance of German firms," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 29-80.
    4. Elsas, Ralf, 2005. "Empirical determinants of relationship lending," Journal of Financial Intermediation, Elsevier, vol. 14(1), pages 32-57, January.
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    Cited by:

    1. Lucie Režňáková & Svatopluk Kapounek, 2015. "Is There a Credit Crunch in the Czech Republic?," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(3), pages 995-1003.
    2. Horváth, Roman & Podpiera, Anca, 2012. "Heterogeneity in bank pricing policies: The Czech evidence," Economic Systems, Elsevier, vol. 36(1), pages 87-108.

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