TY - JOUR
T1 - Corporate choice of banks
T2 - Decision factors, process and responsibility - First evidence
AU - Ongena, S.
AU - Tumer-Alkan, G.
AU - Vermeer, B.
PY - 2011
Y1 - 2011
N2 - In this paper, we investigate how firms choose their banks. We focus on the role played by the decision factors, the decision maker and the decision process in determining firm–bank relationships. We have access to a unique survey that was run by a major bank in the Czech Republic. We find that firms that consider bank reputation to be an important decision factor, have fewer bank relationships and are less likely to reduce the number or quantity of services taken from their banks. Firms that emphasize the price of bank services are more likely to end relationships or to reduce services. Interestingly, the identity of the corporate decision maker determines the number of bank relationships. A Chief Financial Officer deciding on her own will opt for a lower number of banks than a committee of board members.
AB - In this paper, we investigate how firms choose their banks. We focus on the role played by the decision factors, the decision maker and the decision process in determining firm–bank relationships. We have access to a unique survey that was run by a major bank in the Czech Republic. We find that firms that consider bank reputation to be an important decision factor, have fewer bank relationships and are less likely to reduce the number or quantity of services taken from their banks. Firms that emphasize the price of bank services are more likely to end relationships or to reduce services. Interestingly, the identity of the corporate decision maker determines the number of bank relationships. A Chief Financial Officer deciding on her own will opt for a lower number of banks than a committee of board members.
U2 - 10.1016/j.jcorpfin.2010.09.006
DO - 10.1016/j.jcorpfin.2010.09.006
M3 - Article
SN - 0929-1199
VL - 17
SP - 326
EP - 351
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
IS - 2
ER -