Empirical Evidence on the Duration of Bank Relationships

Steven Ongena and David C. Smith

Center for Financial Institutions Working Papers from Wharton School Center for Financial Institutions, University of Pennsylvania

Abstract: We present evidence on the duration of firm-bank relationships using a unique panel data set of connections between Oslo Stock Exchange-listed firms and their banks for the period 1979-1994. We focus on the determinants of the duration of a relationship and the causes for ending an existing bank relationship. We find that duration itself does not greatly influence the likelihood of ending a relationship: short-lived relationships are as likely to end as long-lived relationships. We also find firms that maintain simultaneous multiple-bank relationships are more likely to end a bank relationship than a single-bank firm and that small, highly-leveraged "growth" firms are more likely to end a bank relationship than large, low-leveraged "value" firms.

Keywords: banking relationships; hazard models; duration analysis JEL Codes: G21; C41 (search for similar items in EconPapers)
JEL-codes: C41 G21 (search for similar items in EconPapers)
Date: 1997-03
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Citations: View citations in EconPapers (11)

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Working Paper: Empirical Evidence on the Duration of Bank Relationships (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:wop:pennin:97-15

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