Bank competition, lending relationships and firm default risk : an investigation of Italian SMEs/ created by Mariarosaria Agostino, Francesca Gagliardi and Francesco Trivieri

By:

Agostino, Mariarosaria [author]

Contributor(s):

Material type: Text

TextSeries: International small business journal ; Volume 30, number 8London : Sage, 2012Content type:

text

Media type:

unmediated

Carrier type:

volume

ISSN:

02662426

Subject(s):

Bank concentration -- SMEs -- Concentration of lending relationships -- Italy

LOC classification:

HD2341.167

Online resources:

Click here to access online

Abstract: Building on the literature relating to bank market structure and on the research analysing costs and benefits of concentrated credit relationships, this article aims to empirically assess whether, and to what extent, local credit market concentration impacts on SME default riskiness – making this impact conditional on the closeness of lending relationships. Controlling for inertia, unobserved heterogeneity and endogeneity, we find that bank market concentration positively and significantly affects SME default riskiness when these firms borrow heavily from their main bank and have few credit relationships with other intermediaries. Furthermore, according to our evidence, the influence of credit market concentration on firm default probability is greater as the duration of (close) credit relationships lengthens.

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Holdings
Item type	Current library	Call number	Vol info	Status	Notes	Date due	Barcode
Journal Article	Main Library - Special Collections	HD2341.167 INT (Browse shelf(Opens below))	Vol. 30, no.8 (pages 907-943)	Not for loan	For in house use only

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Building on the literature relating to bank market structure and on the research analysing costs and benefits of concentrated credit relationships, this article aims to empirically assess whether, and to what extent, local credit market concentration impacts on SME default riskiness – making this impact conditional on the closeness of lending relationships. Controlling for inertia, unobserved heterogeneity and endogeneity, we find that bank market concentration positively and significantly affects SME default riskiness when these firms borrow heavily from their main bank and have few credit relationships with other intermediaries. Furthermore, according to our evidence, the influence of credit market concentration on firm default probability is greater as the duration of (close) credit relationships lengthens.

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