The effect of relationship banking on firm efficiency and default risk
Resource type
Author/contributor
- Yildirim, Alev (Author)
Title
The effect of relationship banking on firm efficiency and default risk
Abstract
Does relationship bank oversight reduce firm default risk and improve firm operational efficiency? I find that a new loan from a relationship bank reduces the default probability and increases the efficiency of a borrowing firm, benefiting both banks and borrowers. Moreover, inefficient and less creditworthy firms experience the highest reductions in their default risks and improvements in their efficiencies in the years following new relationship bank loans. Further, these benefits are disrupted when the relationship bank is acquired.
Publication
Journal of Corporate Finance
Date
DEC 2020
Volume
65
Pages
101500
Journal Abbr
J. Corp. Financ.
Citation Key
yildirimEffectRelationshipBanking2020
ISSN
0929-1199
Language
English
Library Catalog
ScienceDirect
Extra
21 citations (Crossref) [2023-10-31]
WOS:000602840200032
Citation
Yildirim, A. (2020). The effect of relationship banking on firm efficiency and default risk. Journal of Corporate Finance, 65, 101500. https://doi.org/10.1016/j.jcorpfin.2019.101500
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