SME’s main bank choice and organizational structure: Evidence from France

Hiba El Hajj Chehade and Ludovic Vigneron

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: The theory suggests that decentralized structures are more efficient than hierarchical ones in decisions based on soft information. According to this, small banks that often have a decentralised structure are more attractive when customers are opaque ones. We propose to test this affirmation using a panel of 6.258 couples (main bank/SME) working in the French market. The results of our several regressions show the existence of a strong tie between the firm’s informational opacity and the choice of a decentralised bank. Moreover, opaque firms are more likely to be credit constrained if they choose a hierarchical bank as their main bank.

Keywords: Main bank; informational opacity; organizational structure; small and medium sized businesses; relationship lending. (search for similar items in EconPapers)
JEL-codes: D82 G21 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-ban and nep-ent
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2007-06

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