Bank lending networks, experience, reputation, and borrowing costs: empirical evidence from the french syndicated lending market

Christophe Godlewski, Bulat Sanditov () and Thierry Burger-Helmchen
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Bulat Sanditov: IMT-BS - DEFI - Département Droit, Économie et Finances - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]

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Abstract: We investigate the network structure of bank lending markets and evaluate the impact of lenders' network centrality, considered a measure of their experience and reputation, on borrowing costs. We show that the French market for syndicated bank loans is a ‘small world' characterized by large local density and short social distances between lenders. Such a network structure allows for better information and resources flows between banks thus enhancing their social captial. We then show that lenders' experience and reputation play a significant role in reducing loan spreads and thus increasing borrower's wealth.

Date: 2012-01
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Citations: View citations in EconPapers (27)

Published in Journal of Business Finance and Accounting, 2012, 39 (1-2), pp.113-140. ⟨10.1111/j.1468-5957.2011.02269.x⟩

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Journal Article: Bank Lending Networks, Experience, Reputation, and Borrowing Costs: Empirical Evidence from the French Syndicated Lending Market (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02302897

DOI: 10.1111/j.1468-5957.2011.02269.x

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