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Relationship finance by banks and non-bank institutional investors: A review within the theory of the firm

  • Andreani, Ettore
  • Neuberger, Doris

In continental Europe, banks are more and more replaced by non-bank institutional investors in the financing and control of firms. This must not imply a shift to arm's length finance, if these institutional investors develop relationships with firms similar to the traditional longterm bank-firm relationship. The present paper differentiates between relationship banking and relationship investing within the theory of the firm and compares the financial and corporate control services provided by both arrangements.

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Paper provided by University of Rostock, Institute of Economics in its series Thuenen-Series of Applied Economic Theory with number 46.

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Date of creation: 2004
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Handle: RePEc:zbw:roswps:46
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