Relationship Lending and Lines of Credit in Small Firm Finance

Abstract

Relationship Lending and Lines of Credit In Small Firm Flnance* I. IntroductIOn * The view:. expre:..;;ed here are our~ dnd do not nece~~ar I\Y reflect those of the BOdrd of Governors of the Federal Reserve or Its staff We thank the plimary editor, Doug 01.1mond, and the dnonymOU'i referee dod second editor for many helpful suggeshon<; that Improved the paper greatly We also thank

Banks with Something to Lose: The Disciplinary Role of Franchise Value

“…Banks typically establish long-term relationships that allow them to gain private information on the characteristics and credit risks of their borrowers-information not readily available to other bank or nonbank lenders (Berger and Udell 1995;Petersen and Rajan 1995). These relationships reduce the cost of loan origination, making lending more profitable.…”

'When the Cat's Away the Mice Will Play': Does Regulation at Home Affect Bank Risk Taking Abroad?

“…However, in a longitudinal study of start-up …rms, surviving …rms were on average considerably larger than …rms that did not survive (Robb et al, 2009). Moreover, in pricing regressions both age and …rm size have been shown to be negatively related to loan interest rates consistent with these characteristic being associated with lower ex ante risk (Petersen and Rajan, 1995;and Berger and Udell, 1995). In addition, Table 5 shows that in particular small …rms and sole proprietorships tend to be considered by banks to have riskier growth prospects as testi…ed by the higher credit constraints such …rms face.…”

“…where Constrained ijklt is a dummy variable equal to 1 if …rm i in locality j in country k in industry l in year t is credit constrained; X ijklt is a matrix of …rm characteristics; Regulation jkt is a measure of home-country bank regulation pertaining to the banks whose branches and subsidiaries are active in locality j in country k in year t; Opaque ijklt is a dummy variable equal to 1 if …rm i in locality j in country k in industry l in year t does not have its accounts audited by an external auditor; D klt is a matrix of country, industry, and time dummies; 11 and " ijklt is an idiosyncratic error term. 12 The …rm-level co-variates control for observable …rm-level heterogeneity.…”

Die ,,Geiselhaft‘‘ des Relationship-Intermediärs: Eine Nachlese zur Beinahe-Insolvenz des Holzmann-Konzerns

“…Die Bauleistung nahm von 1989 bis 1997 jährlich im Durchschnitt um rund 11% zu, wohingegen das durchschnittliche jährliche Wachstum zwischen 1979Wachstum zwischen und 1988 (Handelsblatt, 1999b (Pohl, 1999und Philipp Holzmann AG, 1995 (Berger und Udell, 1995, Elsas und Krahnen, 1998, und Ongena und Smith, 2000 und erzielen im Durchschnitt -auf lange Sicht gesehen -das bessere Marktergebnis (Petersen und Rajan, 1994, Gorton und Schmid, 2000. 4…”