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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Distance, Lending Relationships, and Competition |
| Organization Unit | |
| Authors |
|
| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Finance |
| Publisher | Wiley-Blackwell Publishing, Inc. |
| Geographical Reach | international |
| ISSN | 0022-1082 |
| Volume | 60 |
| Number | 1 |
| Page Range | 231 - 266 |
| Date | 2005 |
| Abstract Text | We study the effect on loan conditions of geographical distance between firms, the lending bank, and all other banks in the vicinity. For our study, we employ detailed contract information from more than 15,000 bank loans to small firms comprising the entire loan portfolio of a large Belgian bank. We report the first comprehensive evidence on the occurrence of spatial price discrimination in bank lending. Loan rates decrease with the distance between the firm and the lending bank and increase with the distance between the firm and competing banks. Transportation costs cause the spatial price discrimination we observe. |
| Free access at | Official URL |
| Official URL | https://onlinelibrary.wiley.com/doi/full/10.1111/j.1540-6261.2005.00729.x |
| Digital Object Identifier | 10.1111/j.1540-6261.2005.00729.x |
| Other Identification Number | merlin-id:11788 |
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