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Contribution Details
| Type | Book Chapter |
| Scope | Discipline-based scholarship |
| Title | Bank-firm relationships: A review of the implications for firms and banks in normal and crisis times |
| Organization Unit | |
| Authors |
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| Editors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Booktitle | The Economics of Interfirm Networks |
| Series Name | Advances in Japanese Business and Economics |
| ISBN | 978-4-431-55389-2 |
| Number | 4 |
| Place of Publication | Berlin |
| Publisher | Springer |
| Page Range | 177 - 189 |
| Date | 2015 |
| Abstract Text | Banks are important providers of external finance to firms. In order to solve asymmetric information problems, firms and banks often engage in bank-firm relationships. Relationship banking occurs when a bank and a borrower enter multiple mutual interactions and both parties invest in obtaining some counterparty specific information, binding bank and firm, to a certain degree, to each other. This chapter starts with a discussion of reasons for having exclusive versus non-exclusive relationships. It provides a concise overview on the determinants of the number and intensity of bank-firm relationships, and reviews how relationship banking generates costs and benefits for both banks and firms. We show that on average bank-firm relationships generate value for both. The costs and benefits of bank-firm relationships, however, vary substantially with whether an economy is in normal or crisis times. |
| Related URLs | |
| Digital Object Identifier | 10.1007/978-4-431-55390-8 |
| Other Identification Number | merlin-id:8504 |
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| Keywords | Relationship banking, Non-exclusivity, Financial crisis |