Multiple but asymmetric bank financing: the case of relationship lending
- Empirical evidence suggests that even those firms presumably most in need of monitoring-intensive financing (young, small, and innovative firms) have a multitude of bank lenders, where one may be special in the sense of relationship lending. However, theory does not tell us a lot about the economic rationale for relationship lending in the context of multiple bank financing. To fill this gap, we analyze the optimal debt structure in a model that allows for multiple but asymmetric bank financing. The optimal debt structure balances the risk of lender coordination failure from multiple lending and the bargaining power of a pivotal relationship bank. We show that firms with low expected cash-flows or low interim liquidation values of assets prefer asymmetric financing, while firms with high expected cash-flow or high interim liquidation values of assets tend to finance without a relationship bank.
| Author: | Ralf Elsas, Frank Heinemann, Marcel TyrellGND |
|---|---|
| URN: | urn:nbn:de:hebis:30-17658 |
| Series (Serial Number): | Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting (141 , vers) |
| Publisher: | Univ., Fachbereich Wirtschaftswiss. |
| Place of publication: | Frankfurt am Main |
| Document Type: | Report |
| Language: | English |
| Year of Completion: | 2004 |
| Year of first Publication: | 2004 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2005/10/06 |
| Tag: | Fremdkapital / Kredit / Bank / Finanzierung / Lieferanten-Kunden-Beziehung / Theorie lender coordination; multiple bank financing; relationship lending |
| GND Keyword: | Bank; Firmenkundengeschäft; Internationaler Kreditmarkt; Unternehmen |
| Issue: | September 9, 2004 |
| Page Number: | 42 |
| Note: | Universität Frankfurt am Main. Fachbereich Wirtschaftswissenschaften: [Working paper series / Finance and accounting] Working paper series, Finance & Accounting ; No. 141 |
| Source: | Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting ; 141 , version 9 Sept. 2004 |
| HeBIS-PPN: | 188879595 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Licence (German): |  Deutsches Urheberrecht |
