 The value of relationship banking: International evidenceCelia Álvarez-Botas and Víctor M. González Research in International Business and Finance, 2023, vol. 64, issue C Abstract: This paper analyses whether repeated borrowing from the same bank affects loan contract terms. We find that relationship loans pay less spread and require less collateral compared to non-relationship loans. These effects for relationship loans are not derived from differences between relationship and nonrelationship loans. The reduction of interest rate spread for relationship loans disappeared during the financial crisis. The results also reveal that borrowers paid higher interest rate spreads, had to post more collateral and the maturity was shortened during the crisis period. The reduction in interest rate spread and collateral depends on the protection of creditors’ rights. In countries where creditors’ rights are well protected, relationship loans pay less spread and are required to post less collateral than relationship loans in countries with weak protection of creditors’ rights. Keywords: Relationship banking; Interest rate spread; Collateral; Maturity; Creditors’ rights; Financial crisis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:64:y:2023:i:c:s0275531922002082 DOI: 10.1016/j.ribaf.2022.101822 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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