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Productive Banks Lend to Productive Firms

Author

Listed:
  • Pérez Reyna, David

    (Universidad de los Andes)

  • Rozada-Najar, Angie

    (Banco de la República)

  • Suaza, Fausto

    (Universidad de los Andes)

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.

Suggested Citation

  • Pérez Reyna, David & Rozada-Najar, Angie & Suaza, Fausto, 2025. "Productive Banks Lend to Productive Firms," Documentos CEDE 21298, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:021298
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    File URL: https://repositorio.uniandes.edu.co/bitstreams/handle/1992/75474/dcede2025-03.pdf
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    More about this item

    Keywords

    firm productivity; bank productivity; lending relationships; productivity measurement;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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