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Lending Relationships in Germany: Empirical Results from Survey Data


  • Harhoff, Dietmar
  • Körting, Timm


We examine empirically the role of lending relationships in determining the collateral requirements, costs and availability of external funding. The data originates from a recently concluded survey of small- and medium-sized German firms. In our descriptive analysis, we explore the borrowing patterns and the concentration of borrowing from financial institutions. Using data on line of credit (L/C) interest rates, collateral requirements, and the firms’ use of fast payment discounts we find that relationship variables may have some bearing on the price of external funds, but much more so on loan collateralization and availability. Firms in financial distress face comparatively high L/C interest rates and reduced credit availability.

Suggested Citation

  • Harhoff, Dietmar & Körting, Timm, 1998. "Lending Relationships in Germany: Empirical Results from Survey Data," CEPR Discussion Papers 1917, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1917

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    References listed on IDEAS

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    More about this item


    Credit Rationing; Financial Intermediation; Lending relationships;

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages


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