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Bargaining power and information in SME lending

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  • Jens Grunert
  • Lars Norden

Abstract

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  • Jens Grunert & Lars Norden, 2012. "Bargaining power and information in SME lending," Small Business Economics, Springer, vol. 39(2), pages 401-417, September.
    • Handle: RePEc:kap:sbusec:v:39:y:2012:i:2:p:401-417
    DOI: 10.1007/s11187-010-9311-6
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    5. Cerqueiro, Geraldo & Degryse, Hans & Ongena, Steven, 2011. "Rules versus discretion in loan rate setting," Journal of Financial Intermediation, Elsevier, vol. 20(4), pages 503-529, October.
    6. Jose M. Liberti & Atif R. Mian, 2009. "Estimating the Effect of Hierarchies on Information Use," The Review of Financial Studies, Society for Financial Studies, vol. 22(10), pages 4057-4090, October.
    7. Grunert, Jens & Norden, Lars & Weber, Martin, 2005. "The role of non-financial factors in internal credit ratings," Journal of Banking & Finance, Elsevier, vol. 29(2), pages 509-531, February.
    8. Andrew Hertzberg & Jose Maria Liberti & Daniel Paravisini, 2010. "Information and Incentives Inside the Firm: Evidence from Loan Officer Rotation," Journal of Finance, American Finance Association, vol. 65(3), pages 795-828, June.
    9. Lars Norden & Martin Weber, 2010. "Credit Line Usage, Checking Account Activity, and Default Risk of Bank Borrowers," The Review of Financial Studies, Society for Financial Studies, vol. 23(10), pages 3665-3699, October.
    10. Kai Rudolph, 2006. "Bargaining Power Effects in Financial Contracting," Lecture Notes in Economics and Mathematical Systems, Springer, number 978-3-540-34496-4, October.
    11. Berger, Allen N. & Miller, Nathan H. & Petersen, Mitchell A. & Rajan, Raghuram G. & Stein, Jeremy C., 2005. "Does function follow organizational form? Evidence from the lending practices of large and small banks," Journal of Financial Economics, Elsevier, vol. 76(2), pages 237-269, May.
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    13. Berger, Allen N. & Udell, Gregory F., 2006. "A more complete conceptual framework for SME finance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2945-2966, November.
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    16. DeYoung, Robert & Glennon, Dennis & Nigro, Peter, 2008. "Borrower-lender distance, credit scoring, and loan performance: Evidence from informational-opaque small business borrowers," Journal of Financial Intermediation, Elsevier, vol. 17(1), pages 113-143, January.
    17. Jeremy C. Stein, 2002. "Information Production and Capital Allocation: Decentralized versus Hierarchical Firms," Journal of Finance, American Finance Association, vol. 57(5), pages 1891-1921, October.
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    21. Blackwell, David W & Winters, Drew B, 1997. "Banking Relationships and the Effect of Monitoring on Loan Pricing," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(2), pages 275-289, Summer.
    22. Sreedhar T. Bharath & Sandeep Dahiya & Anthony Saunders & Anand Srinivasan, 2009. "Lending Relationships and Loan Contract Terms," The Review of Financial Studies, Society for Financial Studies, vol. 24(4), pages 1141-1203.
    23. Jonathan Scott, 2004. "Small Business and the Value of Community Financial Institutions," Journal of Financial Services Research, Springer;Western Finance Association, vol. 25(2), pages 207-230, April.
    24. Karolin Kirschenmann & Lars Norden, 2012. "The Relationship between Borrower Risk and Loan Maturity in Small Business Lending," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 39(5-6), pages 730-757, June.
    25. Hirofumi Uchida, 2006. "Empirical Determinants of Bargaining Power," Discussion papers 06030, Research Institute of Economy, Trade and Industry (RIETI).
    26. Mitchell A. Petersen & Raghuram G. Rajan, 2002. "Does Distance Still Matter? The Information Revolution in Small Business Lending," Journal of Finance, American Finance Association, vol. 57(6), pages 2533-2570, December.
    27. Dries Heyman & Marc Deloof & Hubert Ooghe, 2008. "The Financial Structure of Private Held Belgian Firms," Small Business Economics, Springer, vol. 30(3), pages 301-313, March.
    28. Boot, Arnoud W. A., 2000. "Relationship Banking: What Do We Know?," Journal of Financial Intermediation, Elsevier, vol. 9(1), pages 7-25, January.
    29. Hans-Peter Burghof, 2000. "Credit And Information In Universal Banking," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 52(3), pages 282-309, July.
    30. Petersen, Mitchell A & Rajan, Raghuram G, 1994. "The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March.
    31. Yongjin, Park, 2008. "Parsimonious Lenders: Bank Concentration and Credit Availability to Small Businesses," MPRA Paper 9266, University Library of Munich, Germany.
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    Cited by:

    1. Modina, Michele & Pietrovito, Filomena & Gallucci, Carmen & Formisano, Vincenzo, 2023. "Predicting SMEs’ default risk: Evidence from bank-firm relationship data," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 254-268.
    2. Fotios Pasiouras & Elie Bouri & David Roubaud & Emilios Galariotis, 2021. "Culture and Multiple Firm–Bank Relationships: A Matter of Secrecy and Trust?," Journal of Business Ethics, Springer, vol. 174(1), pages 221-249, November.
    3. Heidi Vander Bauwhede & Michiel De Meyere & Philippe Van Cauwenberge, 2015. "Financial reporting quality and the cost of debt of SMEs," Small Business Economics, Springer, vol. 45(1), pages 149-164, June.
    4. Francesco Ciampi & Alessandro Giannozzi & Giacomo Marzi & Edward I. Altman, 2021. "Rethinking SME default prediction: a systematic literature review and future perspectives," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(3), pages 2141-2188, March.
    5. Refait-Alexandre, Catherine & Serve, Stéphanie, 2020. "Multiple banking relationships: Do SMEs mistrust their banks?," Research in International Business and Finance, Elsevier, vol. 51(C).
    6. John Nkwoma Inekwe, 2016. "Financial Distress, Employees’ Welfare and Entrepreneurship Among SMEs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(3), pages 1135-1153, December.
    7. Eric Tremolada Álvarez (editor), 2013. "Repensando la integración y las integraciones," Books, Universidad Externado de Colombia, Facultad de Finanzas, Gobierno y Relaciones Internacionales, edition 1, volume 1, number 85.
    8. Bigus, Jochen & Weicker, Marina, 2024. "Relationship banking and firms’ earnings quality – Does it matter whether banks are creditors or owners?," Journal of Banking & Finance, Elsevier, vol. 159(C).
    9. Fasano, Francesco & Cappa, Francesco, 2022. "How do banking fintech services affect SME debt?," Journal of Economics and Business, Elsevier, vol. 121(C).
    10. Anna Trunk & Hendrik Birkel, 2022. "No Resilience Without Partners: A Case Study on German Small and Medium-Sized Enterprises in the Context of COVID-19," Schmalenbach Journal of Business Research, Springer, vol. 74(4), pages 537-574, December.
    11. Jouni Juntunen & Mari Juntunen & Vesa Autere & Pekka Kess, 2013. "Outsourcing Strategies and Negotiation Power in Security Sector," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management,, ToKnowPress.
    12. Hidenori Takahashi, 2018. "Affiliation ties and underwriter selection," Small Business Economics, Springer, vol. 50(2), pages 325-338, February.
    13. Raffaella Calabrese & Galina Andreeva & Jake Ansell, 2019. "“Birds of a Feather” Fail Together: Exploring the Nature of Dependency in SME Defaults," Risk Analysis, John Wiley & Sons, vol. 39(1), pages 71-84, January.
    14. José Valente & Mário Augusto & José Murteira, 2022. "Bargaining power and renegotiation of small private debt contracts," Annals of Finance, Springer, vol. 18(4), pages 485-510, December.
    15. Yang Fuming & WeiLun Huang & Liu Xiaojing, 2022. "Micro- and small-sized enterprises’ willingness to borrow via internet financial services during coronavirus disease 2019," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 191-216, March.
    16. Giampaolo Gabbi & Michele Giammarino & Massimo Matthias, 2020. "Die Hard: Probability of Default and Soft Information," Risks, MDPI, vol. 8(2), pages 1-12, May.
    17. Dennis Bams & Magdalena Pisa & Christian C. P. Wolff, 2021. "Spillovers to small business credit risk," Small Business Economics, Springer, vol. 57(1), pages 323-352, June.
    18. Reto Wernli & Andreas Dietrich, 2022. "Only the brave: improving self-rationing efficiency among discouraged Swiss SMEs," Small Business Economics, Springer, vol. 59(3), pages 977-1003, October.
    19. Majida Jrad & Yamina Tadjeddine, 2020. "Collateral Requirements For Sme Loans: Empirical Evidence From Lebanon Country," Working Papers of BETA 2020-46, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    20. Fábio Dias Duarte & Ana Paula Matias Gama & Mohamed Azzim Gulamhussen, 2018. "Defaults in bank loans to SMEs during the financial crisis," Small Business Economics, Springer, vol. 51(3), pages 591-608, October.

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    More about this item

    Keywords

    SME lending; Bargaining power; Hard and soft information; Credit ratings; Loan terms; G21; L11; M13;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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