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Bank lending networks, experience, reputation, and borrowing costs : empirical evidence from the french syndicated lending market

Listed author(s):
  • Christophe J. Godlewski

    (LARGE - Laboratoire de recherche en gestion et économie - Université de Strasbourg)

  • Bulat Sanditov

    ()

    (DEFIS - Droit, Economie, Finances et Sociologie - Télécom Ecole de Management - Institut Mines-Télécom)

  • Thierry Burger-Helmchen

    (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

We investigate the network structure of bank lending markets and evaluate the impact of lenders' network centrality, considered a measure of their experience and reputation, on borrowing costs. We show that the French market for syndicated bank loans is a ‘small world' characterized by large local density and short social distances between lenders. Such a network structure allows for better information and resources flows between banks thus enhancing their social captial. We then show that lenders' experience and reputation play a significant role in reducing loan spreads and thus increasing borrower's wealth.

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Paper provided by HAL in its series Post-Print with number hal-01289953.

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Date of creation: Jan 2012
Publication status: Published in Journal of Business Finance and Accounting, Wiley, 2012, 39 (1-2), pp.113 - 140. <10.1111/j.1468-5957.2011.02269.x>
Handle: RePEc:hal:journl:hal-01289953
DOI: 10.1111/j.1468-5957.2011.02269.x
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01289953
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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