Credit rationing and relationship lending. Does firm size matter?

Stefano Monferra', Stefano Cenni, Stefano Monferrà, Valentina Salotti, Marco Sangiorgi, Giuseppe Torluccio

Research output: Contribution to journalArticle

47 Citations (Scopus)

Abstract

Using survey based data, we investigate factors influencing credit rationing within a bank-based financial system. We show that rationing depends on various dimensions of the firm-bank relationships and that the effects of relationship lending on rationing are not identical for different firm size groups. Multiple-banking increases the probability of rationing for small and large firms. Debt concentration with the main bank affects positively smaller firms, while the opposite is true for large companies. The length of the relationship with the main bank decreases the probability of rationing for both groups, but more so for large firms endowed with more bargaining power. Finally, the firm-bank spatial proximity, measured by the headquarters' vicinity, does not affect the firm's access to credit.
Original languageEnglish
Pages (from-to)249-265
Number of pages17
JournalJOURNAL OF BANKING & FINANCE
Volume53
DOIs
Publication statusPublished - 2015

Keywords

  • Credit rationing
  • Economics and Econometrics
  • Finance
  • Firm financing
  • Probit sample selection models
  • Relationship banking
  • SME

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