On the Non-Exclusivity of Loan Contracts: An Empirical Investigation

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractA string of theoretical papers shows that the non-exclusivity of credit contracts generates important negative contractual externalities. Employing a unique dataset, we identify how these externalities affect the supply of credit. Using internal information on a creditor's willingness to lend, we find that a creditor reduces its credit supply when a borrower obtains a loan at another creditor (an "outside loan"). Consistent with the theoretical literature, the effect is more pronounced the larger the outside loans and it is muted if the initial creditor's existing and future loans retain seniority over the outside loans and are secured with valuable collateral.JEL Classification Numbers: G21, G34, L13, L14.

Sorry, We're Closed: Loan Conditions When Bank Branches Close and Firms Transfer to Another Bank

“…We also believe that investigating the conditions under which a rm obtains a loan from another bank (and not from an existing lender that remains operational or closes its branch) is the most pertinent question -and it is the one addressed in von Thadden (2004). It is correct that moving versus adding a relationship may be a meaningful distinction for de novo rms (Farinha and Santos (2002)) or for rms that switch following bank mergers (Degryse et al (2011)). As we analyze only Moreover, we do not retain rms that cease their relationship with the inside bank (i.e., rms that do not have any business dealings with this bank for more than 12 months), because this question is not relevant in the context of the model presented by von Thadden (2004) Average (median) bank debt for switching rms is ¿532,032 (¿68,424), less than ¿579,224 (¿35,661) observed for nonswitching loans.…”

Foreigners vs. Natives: Bank Lending Technologies and Loan Pricing

“…Regressions, instead, use variation across all observations and control for the average effect of any control variable on the dependent variable in a linear fashion. 34 We match using a procedure similar to Ioannidou and Ongena (2010) and Degryse, Ioannidou and von Schedvin (2016), matching on each variable individually allowing for replacement and multiple neighbors. For discrete variables, we use exact matching.…”

Collateralization, Bank Loan Rates, and Monitoring

“…With this data set Degryse, Ioannidou, and Von Schedvin () investigate the nonexclusivity of Swedish loan contracts.…”