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From soft and hard-nosed bankers: bank lending strategies and the survival of financially distressed firms

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  • Höwer, Daniel

Abstract

Do private banks act as hard-nosed bankers when firms get financially distressed compared to public banks that have the mandate to support regional economy? For German firms in the period 2000-2005, I find that the probability of leaving the market after financial distress is higher for firms financed by private banks. The effects of different lending strategies are even larger for cooperative banks than for public banks.

Suggested Citation

  • Höwer, Daniel, 2009. "From soft and hard-nosed bankers: bank lending strategies and the survival of financially distressed firms," ZEW Discussion Papers 09-059, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:09059
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    More about this item

    Keywords

    financially distressed firms; bank lending; public banks; cooperative banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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