Should I Stay or Should I Go? Firms’ Mobility Across Banks in the Aftermath of the Financial Crisis

Davide Arnaudo, Giacinto Micucci (), Massimiliano Rigon () and Paola Rossi
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Giacinto Micucci: Regional Economic Research Unit

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, 2019, vol. 5, issue 1, No 2, 17-37

Abstract: Abstract We show that the creation of new bank relationships was effective to ease the credit constraints of firms in the aftermath of the 2008–09 financial crisis: firms that started new bank relationships were able to maintain or even increase their outstanding loans. These firms were generally larger and better performers (higher profitability, investments and growth improved the possibility to start new credit relationships). On the opposite, access to new credit lines was more difficult for small and more opaque firms, for which a long-term relationship with their main bank has been the most effective way to mitigate financing constraints. Finally, geographical proximity matters for bank relationships: the closer the firms are to the lending banks, the lower is the probability of closing a credit relationship and the higher of starting a new one.

Keywords: Financial crisis; Mobility in the credit market; Relationship lending (search for similar items in EconPapers)
JEL-codes: G01 G21 G32 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s40797-018-0081-7

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