Keep walking? Geographical proximity, religion, and relationship banking
Thorsten Beck (),
Steven Ongena and
Ilkay Sendeniz-Yüncü ()
Journal of Corporate Finance, 2019, vol. 55, issue C, 49-68
We investigate the geographical proximity of firms to their relationship banks. We find that Islamic banks are more remote to their borrowers. We also find that the probability for a firm to connect to a bank substantially decreases in distance, but that the choice along bank characteristics determines how potent distance is in its impact. If the bank in the vicinity is an Islamic bank, distance plays a more muted role, especially in cities with a high conservative party vote and higher trust in religious institutions. Overall, these findings suggest that the presence of banks with certain characteristics in the vicinity may determine the within-firm and across-firm configurations of observable firm-bank connections. (112 words).
Keywords: Geography of banking; Islamic banking (search for similar items in EconPapers)
JEL-codes: G21 L1 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:55:y:2019:i:c:p:49-68
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