Lending competition and credit availability for new firms: Empirical study with the price cost margin in regional loan markets

Is Relationship Lending Still a Mixed Blessing? A Review of Advantages and Disadvantages for Lenders and Borrowers

“…() find that these banks provide credit at better terms for their members. Ogura () highlights that small cooperative banks provide more credit albeit at a higher cost to their communities in Japan. Ferri et al .…”

“…Angelini et al (1998) find that these banks provide credit at better terms for their members. Ogura (2012) highlights that small cooperative banks provide more credit albeit at a higher cost to their communities in Japan. Ferri et al (2014a,b) find that cooperative banks attempt to smooth financial conditions for their customers by conducting less procyclical loan supply policies than for-profit financial institutions, and by maintaining longer term borrower-lender relationships.…”

The effects of bank market power in short-term and long-term firm credit availability and investment

“…Some studies advocate that bank competition can have positive effects on firm financing (Berger, 1995;Berger and Udell, 2002;Berger and Black, 2011;Boot and Thakor, 2000;Carbó et al, 2009;Cetorelli and Gambera, 2001;Cetorelli, 2004;Elsas, 2005;Ogura, 2010Ogura, , 2012Sapienza, 2002;Dunkelberg, 2003, 2010;Zarutskie, 2006) 1 . In this vein, there has been empirical evidence suggesting that bank concentration reduces firm access external finance, particularly in countries with poor institutional development or significant restrictions to financial activities (Beck et al, 2004).…”

“…As for the intensity of the relationship, some studies document the existence of a U-shaped relationship between market concentration and bank-firm relationships (Degryse and Ongena, 2007;Ogura, 2010Ogura, , 2012Ongena et al, 2012;Presbitero and Zazzaro, 2011). Using loan information of five major German banks, Elsas (2005) shows the existence of a U-shaped relationship between banking concentration in a local credit market and the likelihood of a relational bank-firm tie.…”

“…Other studies have concluded that bank concentration creates informational rents (Ogura, 2010(Ogura, , 2012Petersen and Rajan, 1995) which allow banks to invest specific resources in relationship with borrowers that may also have long-term effects (Degryse and Ongena, 2007;Elsas, 2005;Presbitero and Zazzaro, 2011). Perhaps, the conflicting results suggesting a negative relationship between bank market power and firm financial restrictions (and investment) in some cases, and a positive relationship in other cases, can be somehow reconciled analysing both a short-term and a long-term perspective.…”