How many banks does it take to lend? Empirical evidence from Europe

Christophe J. Godlewski () and Ydriss Ziane ()
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Ydriss Ziane: BETA, Université de Nancy

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

Abstract: We provide empirical evidence on the determinants of the number of bank lenders using a sample of more than 3000 loans to firms from 24 European countries. Our testable hypotheses are built upon different theoretical frameworks drawn from the existing literature, referring to firm characteristics, strategic considerations, geographical distances, bank market concentration, efficiency of legal system, and development of alternative sources of funds. Our main results show that the number and the international diversity of lenders is increased by loan and firm characteristics which reduce agency costs, and by financial structure and legal environment characteristics which mitigate expropriation risk.

Keywords: Lending relationships; number of lenders; bank loans; financial governance; asymmetric information; Europe. (search for similar items in EconPapers)
JEL-codes: G21 G32 G33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-cta, nep-eec and nep-eff
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:lar:wpaper:2008-11

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