Productive Banks Lend to Productive Firms

David Pérez Reyna (), Angie Rozada-Najar () and Fausto Suaza ()
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David Pérez Reyna: Universidad de los Andes
Angie Rozada-Najar: Banco de la República
Fausto Suaza: Universidad de los Andes
Authors registered in the RePEc Author Service: David Perez-Reyna

No 21298, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: Using a unique dataset combining Colombian firm, bank, and credit registry data from 2006 to 2021, we investigate the relationship between bank productivity and the productivity of firms they lend to. We find a positive correlation that strengthened after 2017. We posit a theoretical model to rationalize this finding: more productive banks optimally choose to lend to more productive firms because they can better afford the fixed costs of accessing higher-quality firm profiles.

Keywords: firm productivity; bank productivity; lending relationships; productivity measurement (search for similar items in EconPapers)
JEL-codes: D24 E44 G21 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2025-01-20
New Economics Papers: this item is included in nep-cfn, nep-eff, nep-fdg, nep-lam, nep-mac and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:021298

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