Number of bank relationships : an indicator of competition, borrower quality, or just size?

  • In this study the firms' choice of the number of bank relationships is analyzed with respect to influential factors like borrower quality, size and the existence of a close housebank relationship. Then, the number of bank relationships is used as a proxy to examine if bank competition is reflected in loan terms. It is shown that the number of bank relationships is foremost determined by borrower size and the existence of a housebank relationship. Loan rate spreads are not effected by the number of bank relationships. However, borrowers with a small number of bank relationships provide more collateral and get more credit. These effects are amplified by a housebank relationship. Housebanks get more collateral and are ready to take a larger stake in the financing of their customers.

Download full text files

Export metadata

Additional Services

Share in Twitter Search Google Scholar
Author:Achim Machauer, Martin Weber
Parent Title (German):Institut für Kapitalmarktforschung (Frankfurt am Main): CFS working paper series ; No. 2000,06
Series (Serial Number):CFS working paper series (2000, 06)
Document Type:Working Paper
Year of Completion:2000
Year of first Publication:2000
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2005/06/13
Tag:Bank loan terms; Internal borrower rating; Relationship banking
GND Keyword:Deutschland; Unternehmen; Bank; Beschaffungsmarketing; Beziehungsmanagement; Lieferung; Abnehmer; Bankkredit; Darlehen; Kredit; Betriebsgröße; Unternehmensgröße; Kreditmarkt; Wettbewerb; Wettbewerbsfreiheit; Wettbewerbsfähigkeit; Schätzung; Geschichte 1992-1996
Issue:March 2000
Page Number:27
Source:CFS working paper ; 2000,06
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht