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SME’s main bank choice and organizational structure : Evidence from France

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  • Hiba El Hajj Chehade
  • Ludovic Vigneron

Abstract

The theory suggests that decentralized structures are more efficient than hierarchical ones in decisions based on soft information. According to this, small banks that often have a decentralised structure are more attractive when customers are opaque ones. We propose to test this affirmation using a panel of 6.258 couples (main bank/SME) working in the French market. The results of our several regressions show the existence of a strong tie between the firm’s informational opacity and the choice of a decentralised bank. Moreover, opaque firms are more likely to be credit constrained if they choose a hierarchical bank as their main bank.

Suggested Citation

  • Hiba El Hajj Chehade & Ludovic Vigneron, 2007. "SME’s main bank choice and organizational structure : Evidence from France," Working Papers of LaRGE Research Center 2007-06, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2007-06
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    File URL: http://ifs.u-strasbg.fr/large/publications/2007/2007-06.pdf
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    Cited by:

    1. Djedidi-Kooli, Salima, 2009. "L’accès au financement des PME en France : quel rôle joué par la structure du système bancaire ?," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/8354 edited by Etner, François.
    2. 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.

    More about this item

    Keywords

    Main bank; informational opacity; organizational structure; small and medium sized businesses; relationship lending.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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