Do firms benefit from multiple banking relationships? Evidence from small and medium- sized firms in Japan

Masayo Shikimi

International Economics and Economic Policy, 2013, vol. 10, issue 1, 127-157

Abstract: This paper examines empirically the effects of multiple banking relationships on the cost and availability of credit. The analysis is based on an unbalanced panel data set for Japanese small and medium-sized firms over the period 2000–2002. The Hausman-Taylor estimator is used to allow for possible correlation between unobservable heterogeneity among firms and multiple banking relationships. The results suggest that the cost of credit is positively correlated with the number of banking relationships when the endogeneity of banking relationships is taken into account. Multiple banking relationships have a positive effect on the availability of credit for financially constrained firms. Copyright Springer-Verlag 2013

Keywords: Multiple banking relationships; Small business; Credit cost; Credit availability; G21; G32 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Do Firms Benefit from Multiple Banking Relationships?: Evidence from Small and Medium-Sized Firms in Japan (2005)
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DOI: 10.1007/s10368-011-0196-x

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