Empirical Evidence on the Duration of Bank Relationships

Steven Ongena and David C. Smith
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David C. Smith: Norwegian School of Management

Finance from University Library of Munich, Germany

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 (search for similar items in EconPapers)
JEL-codes: C41 G21 (search for similar items in EconPapers)
Date: 1997-03-18
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Citations: View citations in EconPapers (13)

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Working Paper: Empirical Evidence on the Duration of Bank Relationships (1997)
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