Multiple Banking Relationships

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Multiple Banking Relationships

Author : Catherine Refait-Alexandre
Publisher :
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Multiple Banking Relationships by : Catherine Refait-Alexandre

Download or read book Multiple Banking Relationships written by Catherine Refait-Alexandre and published by . This book was released on 2016 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article focuses on the use of multiple banking relationships by SMEs, a key issue given their strong dependence on bank financing in a context of increasing financial constraints and higher risk of credit rationing since the crisis. We investigate whether the use of multiple banking relationships is explained by firms' characteristics or by the quality of the banking relationship. We exploit the results of an original survey conducted on a sample of French SMEs in December 2012. According to the traditional theoretical framework of multiple banking, we find that older, bigger, and better-performing firms are more likely to access multiple banking relationships. We further find that innovative firms are more likely to engage in multiple banking relationships. We also highlight the explanatory power of an alternative model based on the quality of banking relationship: when the manager trusts its main bank, or when he is closer to his loan officer, the firm will be less likely to engage in multiple banking relationships.

Bank Ownership Type and Banking Relationships

Author : Allen N. Berger
Publisher : World Bank Publications
ISBN 13 : 0222120258
Total Pages : 35 pages
Book Rating : 4.2/5 (221 download)

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Book Synopsis Bank Ownership Type and Banking Relationships by : Allen N. Berger

Download or read book Bank Ownership Type and Banking Relationships written by Allen N. Berger and published by World Bank Publications. This book was released on 2006 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Multiple Banking Relationships and Credit Market Competition

Author : Virginia Tirri
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Multiple Banking Relationships and Credit Market Competition by : Virginia Tirri

Download or read book Multiple Banking Relationships and Credit Market Competition written by Virginia Tirri and published by . This book was released on 2007 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper empirically addresses the question of which are the benefits for a firm to borrow from multiple banks, by explicitly correcting the potential endogeneity of the firm's decision of whether to rely on (and on how may) multiple relationships through a two-stage conditional maximum likelihood (2SCML) estimation technique. The estimation procedure also allows an in-depth analysis of the determinants of the multiple banking choice.The results are consistent with the hypothesis that the likelihood of credit tightening is lower for firms having more lending relationships, and located in less concentrated credit markets. Banking power at firm level and at market level is detrimental to the firm, as it increases the probability of credit constraints. However, firms that engage in multiple relationships benefit from competition among lending banks in terms of a lower probability of tightening, though such competition does not fully outweigh the marginal effect of local banking market power. As for the multiple banking choice, larger, riskier, less profitable and more opaque firms prefer more lending ties, and the number of relationships is also positively related with credit market concentration. I interpret the findings as providing evidence that a key reason why firms rely on multiple banking is their desire to reduce the hold-up costs and the risk of being credit constrained.

Microenterprises and Multiple Bank Relationships

Author : Doris Neuberger
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (837 download)

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Book Synopsis Microenterprises and Multiple Bank Relationships by : Doris Neuberger

Download or read book Microenterprises and Multiple Bank Relationships written by Doris Neuberger and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: An overview of previous evidence about relationship banking to SMEs shows that multiple banking relationships prevail even at small firms, but there is hardly evidence on the number of banking relationships held by micro firms. To close this gap, we use data from a survey conducted among professionals in Germany in 2002. Being self-employed persons acting in the services sector, professionals are mostly informationally opaque micro firms. To explain the number of their banking relationships, we investigate characteristics of the firm and its loan demand, characteristics of the housebank and its relationship to the borrower, and variables of bank market structure and regulation. Consistent with the theory of asymmetric information, we find that these firms hold a small number of bank relationships, which increases in firm size and age. An increase in the duration or importance of the housebank relationship does not induce multiple banking relationships as predicted by the hold-up theory. Professionals rather tend to hold multiple banking relationships to increase their credit availability and finance larger loans. The type of the housebank and local banking market concentration do not seem to matter. All in all, the results indicate that multiple bank relationships help to overcome credit rationing.

Multiple Banking Relationships

Author : Angelo Baglioni
Publisher :
ISBN 13 :
Total Pages : 23 pages
Book Rating : 4.:/5 (535 download)

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Book Synopsis Multiple Banking Relationships by : Angelo Baglioni

Download or read book Multiple Banking Relationships written by Angelo Baglioni and published by . This book was released on 2000 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Microenterprises and Multiple Bank Relationships

Author : Doris Neuberger
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Microenterprises and Multiple Bank Relationships by : Doris Neuberger

Download or read book Microenterprises and Multiple Bank Relationships written by Doris Neuberger and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: While it is conventional wisdom that small and medium-sized firms tend to hold multiple banking relationships, evidence about the financial behavior of micro firms is scarce. The present paper focuses on professionals as a special group of microenterprises. It explains their characteristics and financial relationships, using data from a survey conducted in Germany in 2002. Consistent with the theory of asymmetric information and relationship lending, we find that these firms maintain a small number of bank relationships, which increases in firm size and age. They tend to choose multiple banking relationships to overcome credit rationing and finance larger loans. Credit risk and the structure of the banking market do not seem to matter.

Bank Ownership Type and Banking Relationships

Author : Allen N. Berger
Publisher :
ISBN 13 :
Total Pages : 37 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Bank Ownership Type and Banking Relationships by : Allen N. Berger

Download or read book Bank Ownership Type and Banking Relationships written by Allen N. Berger and published by . This book was released on 2016 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We formulate and test hypotheses about the role of bank ownership type - foreign, state-owned, and private domestic banks - in banking relationships. Our application uses data from India, an important developing nation. The empirical results are consistent with all of our hypotheses with regard to foreign banks. First, these banks tend to establish relationships with relatively transparent firms. Second, firms that have relationships with foreign banks are more likely to enter into multiple banking relationships and to maintain a larger number of such relationships. Finally, firms banking with foreign banks are more likely than others to diversify relationships across bank ownership types. The data are also consistent with the hypotheses that firms with relationships with state-owned banks are relatively unlikely to maintain multiple banking relationships, tend to interact with a smaller number of banks, and less often diversify across ownership types.

Multiple Versus Single Banking Relationships in an Emerging Market

Author : Hai-Chin Yu
Publisher :
ISBN 13 :
Total Pages : 30 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Multiple Versus Single Banking Relationships in an Emerging Market by : Hai-Chin Yu

Download or read book Multiple Versus Single Banking Relationships in an Emerging Market written by Hai-Chin Yu and published by . This book was released on 2006 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the relationship between how firms borrow from banks and various corporate financial characteristics in an emerging economy. Using Taiwanese listed firms over the 1990-2002 period, we find, on the one hand, that older firms tend to maintain a close relationship with a single bank without private information disclosure (i.e. without public debt), in order to benefit from efficient monitoring and avoid information leakage. Larger firms, on the other hand, tend to maintain multiple relationships with banks (requiring duplicate or inefficient monitoring and higher agency costs) with public debt (i.e. private information disclosure). Furthermore, older firms seem to exhibit higher profitability than larger firms. Firms with multiple banking relationships appear to have higher leverage, lower performance (Tobin's Q), higher bank debt ratios, lower fixed assets ratios, and higher collateral requirements than those firms with close single banking relationships. Firms with single banking relationships seem to have stronger financial structures and better loan terms than firms with multiple banking relationships. When firms choose to issue public debt, those with single banking relationships will suffer as a result of severely unfavorable loan terms such as higher collateral required and higher earnings volatility. However, on the other hand, they will exhibit a better financial structure, such as a higher Tobin's Q, lower financial risk (leverage) and lower bank debt ratios among all of the sub-groups. Hence, efficient monitoring associated with private information disclosure to the public will lead to better financial characteristics of firms. However, once this close relationship is broken due to the issue of public debt, unfavorable collateral requirements will follow.Interestingly, when firms that maintain multiple banking relationships choose to issue public debt, this sub-group will appear to have the worst financial structure, such as the lowest Tobin's Q, highest financial risk (leverage) and highest bank debt ratios among all the sub-groups. Hence, inefficient monitoring associated with the disclosure of private information to competitors will result in the worst financial characteristics of firms.

Multiple Banking Relationships

Author : Stefania Cosci
Publisher :
ISBN 13 :
Total Pages : 13 pages
Book Rating : 4.:/5 (954 download)

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Book Synopsis Multiple Banking Relationships by : Stefania Cosci

Download or read book Multiple Banking Relationships written by Stefania Cosci and published by . This book was released on 2000 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt:

A Century of Firm-Bank Relationships

Author : Fabio Braggion
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis A Century of Firm-Bank Relationships by : Fabio Braggion

Download or read book A Century of Firm-Bank Relationships written by Fabio Braggion and published by . This book was released on 2014 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study how relationships between firms and banks evolved between during the Twentieth century in Britain. We document and explain a remarkable transition from single to multiple firm-bank relationships during the last twenty years of the sample period. Larger, global, or transparent companies with greater needs for bank credit and specialized services are more likely to add a bank. Deregulation and intensifying competition in the banking sector during the 1970s spurred banks to supply credit and services through these multilateral arrangements. Firm size, geographical presence, leverage, and control determine whether a clearer bank, another British bank or a foreign bank is added.

Multiple Banking Relationships, Managerial Ownership Concentration and Firm Value

Author : Hai-Chin Yu
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Multiple Banking Relationships, Managerial Ownership Concentration and Firm Value by : Hai-Chin Yu

Download or read book Multiple Banking Relationships, Managerial Ownership Concentration and Firm Value written by Hai-Chin Yu and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how the number of banking relationships affects the interaction between managerial ownership and firm performance, and sheds light on the conditions under which banking relationships play a role in alleviating shareholder-manager conflicts. Our results provide several interesting insights. We document that bank monitoring has substantial value when managers are improperly incentivized, but that it becomes less important when managers are properly incentivized. There is a substitution effect between the value-increasing benefits of managerial ownership and bank monitoring. We also find that any existing free-riding concerns from having too many banking relationships are problematical only when Tobin's Q is high and managerial ownership is high.

Switching from Single to Multiple Bank Lending Relationships

Author : Luísa A. Farinha
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.3/5 ( download)

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Book Synopsis Switching from Single to Multiple Bank Lending Relationships by : Luísa A. Farinha

Download or read book Switching from Single to Multiple Bank Lending Relationships written by Luísa A. Farinha and published by . This book was released on 2000 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Bank Ownership Type and Banking Relationships

Author :
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (2 download)

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Book Synopsis Bank Ownership Type and Banking Relationships by :

Download or read book Bank Ownership Type and Banking Relationships written by and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "The authors formulate and test hypotheses about the role of bank ownership types-foreign, state-owned, and private domestic banks-in banking relationships, using data from India. The empirical results are consistent with all of their hypotheses with regard to foreign banks. These banks tend to serve as the main bank for transparent firms, and firms with foreign main banks are most likely to have multiple banking relationships, have the most relationships, and diversify relationships across bank ownership types. The data are also consistent with the hypothesis that firms with state-owned main banks are relatively unlikely to diversify across bank ownership types. However, state-owned banks often do not provide the main relationship for firms they are mandated to serve (for example, small, opaque firms), and the predictions of negative effects on multiple banking and number of relationships hold for only one type of state-owned bank."--World Bank web site.

Cause and Determinants of Multiple Banking Relationship of SME in Banking Sector

Author : Marina Bou Yazbeck
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)

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Book Synopsis Cause and Determinants of Multiple Banking Relationship of SME in Banking Sector by : Marina Bou Yazbeck

Download or read book Cause and Determinants of Multiple Banking Relationship of SME in Banking Sector written by Marina Bou Yazbeck and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Consumer Bank Selection, Bank Produce Utilisation and Extent of Multiple Banking Relationships in a Central Business District

Author : Teik Hai Oh
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (594 download)

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Book Synopsis Consumer Bank Selection, Bank Produce Utilisation and Extent of Multiple Banking Relationships in a Central Business District by : Teik Hai Oh

Download or read book Consumer Bank Selection, Bank Produce Utilisation and Extent of Multiple Banking Relationships in a Central Business District written by Teik Hai Oh and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Ability of Banks to Lend to Informationally Opaque Small Businesses

Author : N. Allen Berger
Publisher : World Bank Publications
ISBN 13 : 9080401536
Total Pages : 52 pages
Book Rating : 4.0/5 (84 download)

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Book Synopsis The Ability of Banks to Lend to Informationally Opaque Small Businesses by : N. Allen Berger

Download or read book The Ability of Banks to Lend to Informationally Opaque Small Businesses written by N. Allen Berger and published by World Bank Publications. This book was released on 1999 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: August 2001 Large and foreign-owned institutions may have difficulty extending relationship loans to informationally opaque small firms. Bank distress does not appear to affect small business lending, although even small firms may react to bank distress by borrowing from multiple banks. Consolidation of the banking industry is shifting assets into larger institutions that often operate in many nations. Large international financial institutions are geared toward serving large wholesale customers. How does this affect the banking system's ability to lend to informationally opaque small businesses? Berger, Klapper, and Udell test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms, using a rich new data set on Argentinean banks, firms, and loans. They also test hypotheses about borrowing from a single bank versus borrowing from several banks. Their results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms, especially if small businesses are delinquent in repaying their loans. Bank distress resulting from lax prudential supervision and regulation appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, despite raising borrowing costs and destroying some of the benefits of exclusive lending relationships. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to study small and medium size firm financing. The authors may be contacted at [email protected], [email protected], or [email protected].

Hundred Years of British Firm - Bank Relationships

Author : Fabio Braggion
Publisher :
ISBN 13 :
Total Pages : 38 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Hundred Years of British Firm - Bank Relationships by : Fabio Braggion

Download or read book Hundred Years of British Firm - Bank Relationships written by Fabio Braggion and published by . This book was released on 2015 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study how relationships between firms and banks evolved since the end of the Nineteenth century until the end of the Twentieth century in Britain. We document and explain a remarkable shift from bilateral to multilateral relationship banking during this period, in particular during the last two decades of the sample period. Using duration analyses we show that larger, more complex and global companies have a higher need for multiple bank relationships. Older, larger firms that are levering up and engaged with multiple banks are less likely to terminate the relationships they already maintain.