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Empirical Evidence on the Duration of Bank Relationships

  • Steven Ongena

    (Norwegian School of Management)

  • David C. Smith

    (Norwegian School of Management)

We present evidence on the duration of firm-bank relationships using a unique panel data set of connections between Oslo Stock Exchange-listed firms and their banks for the period 1979-1994. We focus on the determinants of the duration of a relationship and the causes for ending an existing bank relationship. We find that duration itself does not greatly influence the likelihood of ending a relationship: short-lived relationships are as likely to end as long-lived relationships. We also find firms that maintain simultaneous multiple-bank relationships are more likely to end a bank relationship than a single-bank firm and that small, highly-leveraged "growth" firms are more likely to end a bank relationship than large, low-leveraged "value" firms.

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Paper provided by EconWPA in its series Finance with number 9703002.

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Date of creation: 18 Mar 1997
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Handle: RePEc:wpa:wuwpfi:9703002
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