Firm Failure and Relationship Lending:New Evidence from Small Businesses

Jose Gomez-Gonzalez and Nidia Reyes ()

Borradores de Economia from Banco de la Republica de Colombia

Abstract: We study the effect of relationship lending on small firms failure probability using a uniquely rich data set comprised of information on individual loans of a large number of small firms in Colombia. We control for firm-specific variables and find that small firms involved in long-term liaisons with commercial banks have a significantly lower probability of becoming bankrupt than otherwise identical firms not involved in a long-term credit relationship. We also find that small firms with multiple banking relationships face a lower failure hazard than otherwise identical firms involved in a unique long-term relationship.

Keywords: Firms; bank relationships; survival analysis. (search for similar items in EconPapers)
JEL-codes: C40 G20 G21 (search for similar items in EconPapers)
Date: 2011-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.32468/be.638 (application/pdf)

Related works:
Working Paper: Firm Failure and Relationship Lending: New Evidence from Small Businesses (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:638

Access Statistics for this paper

More papers in Borradores de Economia from Banco de la Republica de Colombia Cra 7 # 14-78. Contact information at EDIRC.
Bibliographic data for series maintained by Clorith Angélica Bahos Olivera ().