Do Firms Benefit from Concentrating their Borrowing? Evidence from the Great Recession*

Gobbi, Giorgio; Sette, Enrico

doi:10.1093/rof/rft017

Cited by 76 publications

(39 citation statements)

References 33 publications

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“…Focusing on bank relationships, Dewatripont and Maskin (1995), and Gobbi and Sette, (2014) find that the presence of a significant number of creditors complicates the refinancing process and makes lending less profitable which deters banks from making additional inefficient credit provisions. On the other hand, banks could also prefer to jointly grant loans to the same subject in order to diversify the risk of a liquidity crisis .…”

Section: Number Of Banks With Which a Firm Has Relationshipsmentioning

confidence: 99%

Credit rationing and relationship lending. Does firm size matter?

Cenni

Monferrà

Salotti

et al. 2015

Journal of Banking & Finance

131

115

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Section: Number Of Banks With Which a Firm Has Relationshipsmentioning

confidence: 99%

Credit rationing and relationship lending. Does firm size matter?

Cenni

Monferrà

Salotti

et al. 2015

Journal of Banking & Finance

131

115

View full text Add to dashboard Cite

“…Other studies that have examined the value of relationship banking in the post-2008 crisis period are Gobbi and Sette (2014), who focus on the availability of credit of Italian firms. They investigate whether the extent to which firms concentrate their borrowing from banks mitigates the credit contraction that followed the default of Lehman.…”

Section: Relationship Banking and Sme Financingmentioning

confidence: 99%

Relationship banking and regional SME financing: the case of Wales

Degryse

Matthews

Zhao

2017

IJBAAF

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Regional disparities in credit availability across the UK have been highlighted in a series of studies as a factor affecting both new firm starts and small firm growth prospects. This paper suggests that relationship banking might be an important means of attenuating differences in credit availability. The paper focuses on the value of relationship banking to SMEs in Wales in the period following the global banking crisis. The results show that SMEs that had developed a customer-loan relationship with their banks had a lower probability of experiencing a worsened credit outcome than those that did not. The implications of the findings for regional finance provision are discussed.

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“…As other studies have recently observed (e.g. Gobbi and Sette, 2011), Italy is an ideal laboratory for this kind of analysis, because the Italian financial system is bank-based and banks represent a fundamental partner of firms in providing funds.…”

Section: Datamentioning

confidence: 93%

Relationship Lending and Credit Quality

2013

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We analyze if the relationship lending reduces the borrower's probability of borrowers' default and if this beneficial effect operates also for those borrowers who are more exposed to the economic downturn. By using unique, matched data of 43,000 firms and their lending institutions between 2008 and 2010, we document that the probability that a firm becomes distressed decreases when the creditor concentration is high and the duration of bank-firm relationships is long. While these results seem to support the beneficial effect of the relationship lending practices, we note that the organizational distance of banks and collateral also matters both as determinants of loan distress and as determinants of loan downgrading. The results are stronger for smaller firms.JEL classification: G21

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Do Firms Benefit from Concentrating their Borrowing? Evidence from the Great Recession*

Cited by 76 publications

References 33 publications

Credit rationing and relationship lending. Does firm size matter?

Credit rationing and relationship lending. Does firm size matter?

Relationship banking and regional SME financing: the case of Wales

Relationship Lending and Credit Quality

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