Creditor concentration: An empirical investigation

Steven Ongena, Günseli Tümer-Alkan and Natalja v. Westernhagen

European Economic Review, 2012, vol. 56, issue 4, 830-847

Abstract: Most of the literature on multiple banking assumes equal financing shares. However, unequal, asymmetric or concentrated bank borrowing is widespread, and creditor concentration is only weakly correlated with the number of bank relationships. This paper therefore investigates the determinants of creditor concentration for German firms using a comprehensive firm-bank level dataset for the time period between 1993 and 2003. We document that corporate borrowing from banks is very often concentrated, even for the largest firms in our sample. Leveraged firms and firms with more redeployable assets concentrate their borrowing from banks, as are firms dealing with a relationship lender that is profitable, that has lower monitoring costs, or that operates in a concentrated regional lending market.

Keywords: Bank relationships; Asymmetric financing; Banking competition (search for similar items in EconPapers)
JEL-codes: G21 G32 G33 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (29)

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Working Paper: Creditor concentration: an empirical investigation (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:56:y:2012:i:4:p:830-847

DOI: 10.1016/j.euroecorev.2012.02.001

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