Do bank-firm relationships influence firm internationalization?

Riccardo De Bonis, Giovanni Ferri and Zeno Rotondi ()
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Zeno Rotondi: UniCredit Group, Head of Research and Competitors Benchmarking,, Retail Division

No 37, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: We show that a longer relationship length with the main bank fosters Italian firms' foreign direct investment (FDI) and, weakly, production off-shoring abroad. Possibly, longer bank relationships help secure external financing for these companies, which have become more opaque because of their internationalization. In contrast, other than for smaller-sized companies, we detect no impact on firms' propensity to export, suggesting that exporting alters enterprises' financial set-up less than shifting production internationally. We also find a link between the internationalization of the main creditor bank and firm FDIs. Our evidence suggests that reexisting strong bank-firm relationships support manufacturing firms' production internationalization.

Keywords: bank-firm relationships; export; external finance; foreign direct investments; internationalization; off-shoring (search for similar items in EconPapers)
JEL-codes: D21 F10 F21 F23 G21 (search for similar items in EconPapers)
Pages: 26
Date: 2010-04
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cse, nep-eff, nep-ifn, nep-int and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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