IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01391629.html
   My bibliography  Save this paper

Multiple Banking Relationships: Choice Of The Number Of Main Banks And Choice Of The Number Of Banks
[La Multibancarité Des Entreprises]

Author

Listed:
  • Catherine Refait-Alexandre

    (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

Abstract

This empirical paper focuses on the total number of banks and the number of main banks (banks that play an important and durable role in the financing) of firms. We test two major results of the theoretical literature: Low quality firms are likely to choose a high number of banks, in order to escape from a close monitoring. Strong multiple banking relationships benefit high quality firms, for they don't pay the infor- mational rent that a single bank would have extracted. We use accounting variables and credit declarations for industrial French firms. We show that the total number of banks increases when the economic profitability of the firm decreases. No important link appears between the performance of the firms and their number of main banks.

Suggested Citation

  • Catherine Refait-Alexandre, 2003. "Multiple Banking Relationships: Choice Of The Number Of Main Banks And Choice Of The Number Of Banks [La Multibancarité Des Entreprises]," Post-Print hal-01391629, HAL.
    • Handle: RePEc:hal:journl:hal-01391629
    DOI: 10.3917/reco.543.0649
    Note: View the original document on HAL open archive server: https://hal.science/hal-01391629
    as

    Download full text from publisher

    File URL: https://hal.science/hal-01391629/document
    Download Restriction: no
    File URL: https://libkey.io/10.3917/reco.543.0649?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Berger, Allen N. & Klapper, Leora F. & Udell, Gregory F., 2001. "The ability of banks to lend to informationally opaque small businesses," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2127-2167, December.
    2. Foglia, A. & Laviola, S. & Marullo Reedtz, P., 1998. "Multiple banking relationships and the fragility of corporate borrowers," Journal of Banking & Finance, Elsevier, vol. 22(10-11), pages 1441-1456, October.
    3. Gangopadhyay, Shubhashis & Mukhopadhyay, Bappaditya, 2002. "Multiple bank lending and seniority in claims," Journal of Economics and Business, Elsevier, vol. 54(1), pages 7-30.
    4. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    5. D'Auria, Claudio & Foglia, Antonella & Reedtz, Paolo Marullo, 1999. "Bank interest rates and credit relationships in Italy," Journal of Banking & Finance, Elsevier, vol. 23(7), pages 1067-1093, July.
    6. Enrica Detragiache & Paolo Garella & Luigi Guiso, 2000. "Multiple versus Single Banking Relationships: Theory and Evidence," Journal of Finance, American Finance Association, vol. 55(3), pages 1133-1161, June.
    7. Fama, Eugene F., 1985. "What's different about banks?," Journal of Monetary Economics, Elsevier, vol. 15(1), pages 29-39, January.
    8. Agarwal, Rajshree & Ann Elston, Julie, 2001. "Bank-firm relationships, financing and firm performance in Germany," Economics Letters, Elsevier, vol. 72(2), pages 225-232, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Annalisa Castelli & Gerald P. Dwyer & Iftekhar Hasan, 2006. "Bank relationships and small firms’ financial performance," FRB Atlanta Working Paper 2006-05, Federal Reserve Bank of Atlanta.
    2. repec:zbw:bofrdp:2009_036 is not listed on IDEAS
    3. Annalisa Castelli & Gerald P. Dwyer & Iftekhar Hasan, 2012. "Bank Relationships and Firms' Financial Performance: The Italian Experience," European Financial Management, European Financial Management Association, vol. 18(1), pages 28-67, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dau:papers:123456789/3322 is not listed on IDEAS
    2. Tumer-Alkan, G., 2008. "Essays on banking," Other publications TiSEM 8d5ec521-4702-4e75-bc79-a, Tilburg University, School of Economics and Management.
    3. Annalisa Castelli & Gerald P. Dwyer & Iftekhar Hasan, 2006. "Bank relationships and small firms’ financial performance," FRB Atlanta Working Paper 2006-05, Federal Reserve Bank of Atlanta.
    4. Amanda Carmignani & Massimo Omiccioli, 2007. "Costs and benefits of creditor concentration: An empirical approach," Temi di discussione (Economic working papers) 645, Bank of Italy, Economic Research and International Relations Area.
    5. repec:zbw:bofrdp:2009_036 is not listed on IDEAS
    6. Annalisa Castelli & Gerald P. Dwyer & Iftekhar Hasan, 2012. "Bank Relationships and Firms' Financial Performance: The Italian Experience," European Financial Management, European Financial Management Association, vol. 18(1), pages 28-67, January.
    7. Hans Degryse & Steven Ongena, 2002. "Bank-Firm Relationships and International Banking Markets," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(3), pages 401-417.
    8. Annalisa Castelli & Gerald P. Dwyer & Iftekhar Hasan, 2012. "Bank Relationships and Firms' Financial Performance: The Italian Experience," European Financial Management, European Financial Management Association, vol. 18(1), pages 28-67, January.
    9. Antje Brunner & Jan Pieter Krahnen, 2013. "Hold-up in multiple banking: evidence from SME lending," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 5(1/2), pages 78-101.
    10. Doris Neuberger & Solvig Räthke, 2009. "Microenterprises and multiple bank relationships: The case of professionals," Small Business Economics, Springer, vol. 32(2), pages 207-229, February.
    11. Christina Bannier, 2007. "Heterogeneous multiple bank financing: does it reduce inefficient credit-renegotiation incidences?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 21(4), pages 445-470, December.
    12. Gorton, Gary & Winton, Andrew, 2003. "Financial intermediation," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 8, pages 431-552, Elsevier.
    13. Masayo Shikimi, 2013. "Do firms benefit from multiple banking relationships? Evidence from small and medium- sized firms in Japan," International Economics and Economic Policy, Springer, vol. 10(1), pages 127-157, March.
    14. Christophe J. GODLEWSKI & Ydriss Ziane, 2008. "How many banks does it take to lend? Empirical evidence from Europe," Working Papers of LaRGE Research Center 2008-11, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    15. Rim Tlili, 2016. "Monitoring, Loan Rates and Threat of Enterprise Liquidation in a Bank Relationship," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(5), pages 1-2.
    16. Refait-Alexandre, Catherine & Serve, Stéphanie, 2020. "Multiple banking relationships: Do SMEs mistrust their banks?," Research in International Business and Finance, Elsevier, vol. 51(C).
    17. Doris Neuberger & Christoph Schacht, 2005. "The Number of Bank Relationships of SMEs: A Disaggregated Analysis for the Swiss Loan Market," Finance 0506018, University Library of Munich, Germany.
    18. Doris Neuberger & Maurice Pedergnana & Solvig Räthke-Döppner, 2008. "Concentration of Banking Relationships in Switzerland: The Result of Firm Structure or Banking Market Structure?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 33(2), pages 101-126, April.
    19. Doris Neuberger & Christoph Schacht, 2005. "The Number of Bank Relationships of SMEs: A Disaggregated Analysis for the Swiss Loan Market," Finance 0509001, University Library of Munich, Germany.
    20. Farinha, Luisa A. & Santos, Joao A. C., 2002. "Switching from Single to Multiple Bank Lending Relationships: Determinants and Implications," Journal of Financial Intermediation, Elsevier, vol. 11(2), pages 124-151, April.
    21. Hakimi, Abdelaziz, 2018. "Threshold Effect of the Number of Bank Relationships on the Tunisian Firm Performance," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 9(2), pages 317-330, April.
    22. Tlili, Rim, 2012. "Comment justifier la multibancarité au sein des PME ?," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/10919 edited by Etner, François.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01391629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.