Multiple Banking Relationships: Do SMEs Mistrust Their Banks?

Catherine Refait-Alexandre and Stéphanie Serve

Working Papers from HAL

Abstract: This article focuses on the use of multiple banking relationships by SMEs, a key issue given their strong dependence on bank financing in a context of increasing financial constraints and higher risk of credit rationing since the crisis. We investigate whether the use of multiple banking relationships is explained by firms' characteristics or by the quality of the banking relationship. We exploit the results of an original survey conducted on a sample of French SMEs in December 2012. According to the traditional theoretical framework of multiple banking, we find that older, bigger, and betterperforming firms are more likely to access multiple banking relationships. We further find that innovative firms are more likely to engage in multiple banking relationships. We also highlight the explanatory power of an alternative model based on the quality of banking relationship: when the manager trusts its main bank, or when he is closer to his loan officer, the firm will be less likely to engage in multiple banking relationships.

Keywords: multiple banking relationships; trust; credit rationing; financial crisis (search for similar items in EconPapers)
Date: 2016-01-01
New Economics Papers: this item is included in nep-ban, nep-ent and nep-sbm
Note: View the original document on HAL open archive server: https://hal.science/hal-01376901v1
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Multiple banking relationships: Do SMEs mistrust their banks? (2020)
Working Paper: Multiple banking relationships: do SMEs mistrust their banks? (2020)
Working Paper: Multiple banking relationships: do SMEs mistrust their banks? (2017)
Working Paper: Multiple banking relationships: do SMEs mistrust their banks? (2016)
Working Paper: Multiple banking relationships: do SMEs mistrust their banks? (2015)
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