Hold-up in multiple banking: evidence from SME lending
- This paper analyzes loan pricing when there is multiple banking and borrower distress. Using a unique data set on SME lending collected from major German banks, we can instrument for effective coordination between lenders, carrying out a panel estimation. The analysis allows to distinguish between rents that accrue due to single bank lending, rents that accrue due to relationship lending, and rents that accrue due to the elimination of competition among multiple lenders. We find the relationship lending to have no discernible impact on loan spreads, while both single lending and coordinated multiple lending significantly increase the spread. Thus, contrary to predictions in the literature, multiple lending does not insure the borrower against hold-up. JEL Classification: D74, G21, G33, G34
| Author: | Antje BrunnerGND, Jan Pieter KrahnenORCiDGND |
|---|---|
| URN: | urn:nbn:de:hebis:30-78605 |
| Parent Title (German): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2010,07 |
| Series (Serial Number): | CFS working paper series (2010, 07) |
| Document Type: | Working Paper |
| Language: | English |
| Year of Completion: | 2010 |
| Year of first Publication: | 2010 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2010/08/19 |
| Tag: | Banking Competition; Coordination; Credit Spread; Distress; Hold-up |
| GND Keyword: | Deutschland; Klein- und Mittelbetrieb; Bankkredit; Preisbildung; Preispolitik |
| HeBIS-PPN: | 226429369 |
| Institutes: | Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
