An Empirical Study on the Effects of Bank-Firm Relationship on Small Firm Borrowings (in Korean)

Jung-Jin Lee () and Soo-Young Hwang ()
Additional contact information
Jung-Jin Lee: Department of Business Administration, Sogang University
Soo-Young Hwang: IBK Economic Research Institute

Economic Analysis (Quarterly), 2013, vol. 19, issue 1, 77-105

Abstract: This study investigates how the bank-firm relationship affects the loaning costs for small firms in Korea. Empirical results show that the stronger is the bank-firm relationship, the lower the interest rates for the loan, implying the existence of benefits from bank-firm relationship. We also find that the effects of relationship depend on competition, information transparency, and distance, that is, the benefits from relationship banking are found more strongly when the credit market competition is weaker, the borrower-lender distance is shorter, and the information transparency is lower. One of policy implications is that the financing of small firms can be improved by lowering the information collecting costs on the part of the banks.

Keywords: bank-firm relationship; relationship banking; credit market competition; information transparency; borrower-lender distance (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bok.or.kr/ucms/cmmn/file/fileDown.do?m ... 00001016795&fileSn=1 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bok:journl:v:19:y:2013:i:1:p:77-105

Access Statistics for this article

Economic Analysis (Quarterly) is currently edited by Wook Sohn, Hwan-koo Kang and Jaerang Lee

More articles in Economic Analysis (Quarterly) from Economic Research Institute, Bank of Korea Contact information at EDIRC.
Bibliographic data for series maintained by Economic Research Institute ().