This paper examines how bank relationships affect firm performance. An empirical implication of recent theoretical models is that firms maintaining multiple bank relationships are less profitable than their single-bank peers. We investigate this empirical implication using a data set containing virtually all Norwegian publicly listed firms for the period 1979-1995. We find that profitability is substantially higher if firms maintain only a single bank relationship. We also find that firms replacing a single bank relationship are on average smaller and younger than firms not replacing a single bank relationship.
Original language | English |
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Place of Publication | Tilburg |
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Publisher | Finance |
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Number of pages | 38 |
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Volume | 2000-14 |
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Publication status | Published - 2000 |
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Name | CentER Discussion Paper |
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Volume | 2000-14 |
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- bank relationships
- firm profitability