Do Firm-Bank `Odd Couples' Exacerbate Credit Rationing?

Giovanni Ferri, Pierluigi Murro and Zeno Rotondi
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Zeno Rotondi: UniCredit Group's Retail Research Division

No 31, SERIES from Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro"

Abstract: We start considering an optimal matching of opaque (transparent) borrowing firrms with relational (transactional) lending main banks. Next we contemplate the possibility that firm-bank "odd couples" materialize where opaque (transparent) firrms end up matched with transactional (re- lational) main banks. We conjecture the "odd couples" emerge either since the bank's lending technology is not perfectly observable to the rm or because riskier firrms - even though opaque - strategically select transac- tional banks in the hope of being classified as lower risks. Our econometric results show the probability of rationing is larger when firrms and banks match in "odd couples".

Keywords: Relationship Banking; Credit Rationing and Asymmetric Information (search for similar items in EconPapers)
JEL-codes: D84 G21 (search for similar items in EconPapers)
Pages: 883
Date: 2010-07, Revised 2010-07
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http://www.seriesworkingpapers.it/RePEc/bai/series/Economia-Series31.pdf (application/pdf)

Related works:
Journal Article: Do firm–bank ‘odd couples’ exacerbate credit rationing? (2015)
Working Paper: Do Firm-Bank ``Odd Couples'' Exacerbate Credit Rationing? (2012)
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