Nowhere Else to Go: The Determinants of Bank-Firm Relationship Discontinuations After Bank Mergers

Oliver Rehbein () and Santiago Carbo-Valverde ()
Authors registered in the RePEc Author Service: Santiago Carbo Valverde

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: The decision to change or terminate a bank-firm relationship has been demonstrated to be crucial for firm performance following bank mergers. We find both competition and the available firm collateral to be important factors in enabling firms to switching banks, instead of dropping their bank relationships. We also provide novel evidence that firms who are able to \textit{add} a bank relationship following a merger exhibit much stronger post-merger performance. Our findings are consistent with the interpretation that bank-mergers cause a reduction in lending to most firms, leading them to search for alternative sources of finance.

Keywords: bank mergers; relationship banking; competition (search for similar items in EconPapers)
JEL-codes: G21 G34 (search for similar items in EconPapers)
Pages: 39
Date: 2018-09
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn, nep-com and nep-sbm
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Related works:
Journal Article: Nowhere else to go: Determinants of bank–firm relationship discontinuations after bank mergers (2023)
Working Paper: Nowhere Else to Go: The Determinants of Bank-Firm Relationship Discontinuations after Bank Mergers (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2018_044

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