Multiple Bank Relationships and the Main Bank System: Evidence from a Matched Sample of Japanese Small Firms and Main Banks

Kazuo Ogawa, Elmer Sterken and Ichiro Tokutsu ()
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Ichiro Tokutsu: Kobe University

Chapter Chapter 4 in The Economics of Imperfect Markets, 2010, pp 73-90 from Springer

Abstract: Abstract Based on a matched sample of Japanese small firms and main banks we investigate the bank-firm relationships in the early 2000s. We obtain new findings. First, even small firms with a main bank relation have multiple bank relationships. Second, firms tied with a financially weak main bank increase the number of bank relations. Third, longer duration of a main bank relation increases the number of bank relations. Moreover we find that firms with fewer bank relations pledge personal guarantees to their main banks and are charged a higher interest rate. This suggests that firms take actions against the monopoly power of a main bank.

Keywords: Capital Ratio; Loan Contract; Main Bank; Affiliate Firm; Client Firm (search for similar items in EconPapers)
Date: 2010
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Working Paper: Multiple Bank Relationships and the Main Bank System: Evidence from a Matched Sample of Japanese Small Firms and Main Banks (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-7908-2131-4_4

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DOI: 10.1007/978-3-7908-2131-4_4

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