Bankruptcies of small firms and lending relationship

Katsutoshi Shimizu

Journal of Banking & Finance, 2012, vol. 36, issue 3, 857-870

Abstract: This paper empirically investigates the role played by relatively small banks in the Japanese local credit market. We test the hypothesis that small banks enhance the recovery rate from the financial distress and reduce the bankruptcy ratio of small firms. Empirical evidence suggests that small banks specialize more in relationship loans to small firms. However, this expertise is limited to the loans to unincorporated firms or those with a very small number of employees.

Keywords: Lending relationship; Japanese banks; Nonperforming loans; Bankruptcy; Small business; Credit union (search for similar items in EconPapers)
JEL-codes: G21 G28 G33 K23 L31 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:36:y:2012:i:3:p:857-870

DOI: 10.1016/j.jbankfin.2011.09.016

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