The Benefits of Relationship Banking: Evidence from Small Business Financing in Finland

Peltoniemi, Janne

doi:10.1007/s10693-007-0009-0

Cited by 45 publications

(43 citation statements)

References 29 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Moreover, the strength of the bank-borrower relationship is also positively related to various credit terms. Borrowers with longer banking relationships pay lower interest rates (e.g., Berger and Udell 1995;Blackwell and Winters 1997;Harhoff and Körting 1998;Scott and Dunkelberg 1999;Degryse and Van Cayseele 2000;Bodenhorn 2003;Peltoniemi 2007), have greater protection against the interest rate cycle (e.g., Berlin and Mester 1998;Ferri and Messori 2000) and are also empirically associated with reduced collateral requirements (e.g., Berger and Udell 1995;Harhoff and Körting 1998;Cole 1998;Elsas and Krahnen 1998;Machauer and Weber 1998;Scott and Dunkelberg 1999).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Explaining loan rate differentials between small and large companies: evidence from Switzerland

Dietrich

2010

Small Bus Econ

View full text Add to dashboard Cite

The lending-rate differentials between loans to small and large companies are striking. According to several studies, these disparities of loan rates are primarily a result of a lower informational efficiency at small companies. This study examines to what extent such differences in loan rates are caused not only by informational inefficiencies, but also by operational costs and the borrower's negotiation power. By using unique, hand-collected data from the credit-pricing models of 15 Swiss regional banks, we provide new empirical evidence that operational costs are a key factor in explaining differences in lending rates between small and large enterprises. Furthermore, we also found that the lack of negotiation power of small enterprises-expressed in the profit margin amount of the bank-has significant explanatory power.

show abstract

Section: Theoretical Backgroundmentioning

confidence: 99%

Explaining loan rate differentials between small and large companies: evidence from Switzerland

Dietrich

2010

Small Bus Econ

View full text Add to dashboard Cite

show abstract

“…Certains auteurs démontrent une incidence sur la performance des PME (Fok, Chang et Lee, 2004). Le taux d'intérêt et les garanties sont tributaires de la longévité (Peltoniemi, 2007) et de l'étendue de la relation banque/entreprise (Degryse et Van Cayseele, 2000). De même, la concentration sur quelques banques réduit le risque des PME et leur permet de négocier des prêts à des coûts plus bas.…”

Section: Le Financement Bancaireunclassified

La recherche en finance entrepreneuriale

St‐Pierre

Fadil²

2011

Revue internationale P.M.E.

View full text Add to dashboard Cite

La finance entrepreneuriale est un domaine de recherche qui se voulait émergent il y a près de trente ans et pour lequel certains chercheurs de renom ont proposé des agendas de recherche spécifiques et stimulants. Or le recensement de plusieurs centaines d’articles publiés révèle que les auteurs ont centré leur attention sur des questions de recherche traditionnelles, laissant souvent de côté les préconisations des experts qui recommandaient notamment d’inclure l’entrepreneur dans les travaux et d’emprunter à la littérature en entrepreneuriat des méthodes et théories pouvant aider à mieux comprendre les questions financières des PME. L’objet de cet article est de faire un survol des travaux réalisés au cours des quinze dernières années en regard des besoins de connaissances spécifiques permettant de favoriser la création et l’émancipation des PME, grâce, notamment, à un financement adéquat. À la vue de ce qui nous semble être un écart entre les connaissances disponibles et celles qui seraient souhaitables selon l’OCDE, et en nous situant dans un contexte de modification de l’environnement d’affaires mondial, nous proposons aux chercheurs intéressés à contribuer au domaine de la finance entrepreneuriale quelques pistes de recherche pour les travaux futurs.

show abstract

“…Another variable related to the contract terms of the selected loan is the credit limit (LIM) defined as the natural logarithm (ln) of the limit (amount) of the short-term credit operation, borrowed by the observed firm from the lending bank (variable presented in this way in the study by Peltoniemi, 2007).…”

Section: Dependent Variables: Contract Terms Of the Selected Loanmentioning

confidence: 99%

“…Collateral (COLL) is a dummy variable with the value of "1" when the guarantee associated with the credit operation is a collateral, with a value equal to the loan and "0" in the remaining situations (variable presented in this way in the study by Peltoniemi, 2007). The literature in the field also suggests that attachment of more and better guarantees reduces the cost of the credit.…”

Section: Dependent Variables: Contract Terms Of the Selected Loanmentioning

confidence: 99%

“…The highest value detected (-0,581) refers to the correlation between the variables of "risk premium" and "credit limit". This value is not worrying, considering the fact that in the process of analysing firm credit, the cost of credit is set independently of the definition of the credit limit granted/to be granted (Peltoniemi, 2007), and so the hypothesis of possible endogeneity between selected dependent variables is negligible.…”

Section: Dependent Variables: Contract Terms Of the Selected Loanmentioning

confidence: 99%

See 1 more Smart Citation

Banking relationship and credit terms: empirical evidence from Portuguese small firms

Matias¹,

Serrasqueiro²,

Costa³

2010

AJSMS

View full text Add to dashboard Cite

Based on a sample of Micro and Small-sized Enterprises (MSE) financed by a large Portuguese bank, this study seeks to assess the importance of the banking relationship for MSE to obtain better credit terms, i.e. higher credit limit, lower risk premium and less probability that collateral must be provided. We conclude that long term banking relationship alone is not important for firms to obtain better bank credit terms. However, greater borrowing concentration allows MSE to obtain a lower risk premium and a higher limit of credit. The magnitude of these impacts are affected by some specificities related to firm size, economic-financial performance and the position of the lending bank in the local banking market.

show abstract

The Benefits of Relationship Banking: Evidence from Small Business Financing in Finland

Abstract: Relationship banking, relationship lending, small business finance, loan pricing, collateral,

Cited by 45 publications

References 29 publications

Explaining loan rate differentials between small and large companies: evidence from Switzerland

Explaining loan rate differentials between small and large companies: evidence from Switzerland

La recherche en finance entrepreneuriale

Banking relationship and credit terms: empirical evidence from Portuguese small firms

Contact Info

Product

Resources

About