Abstract
How do banks react to increased competition?Recent banking theory offers conflicting predictions about the impact of competition on bank orientation - i.e., the choice of relationship based versus transactional banking.We empirically investigate the impact of interbank competition on bank branch orientation.We employ a unique data set containing detailed information on bank-firm relationships.We find that bank branches facing stiff local competition engage considerably more in relationship-based lending.Our results illustrate that competition and relationships are not necessarily inimical.
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | Finance |
| Number of pages | 42 |
| Volume | 2006-68 |
| Publication status | Published - 2006 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 2006-68 |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 1 No Poverty -
SDG 8 Decent Work and Economic Growth
Keywords
- bank orientation
- bank industry specialization
- competition
- lending relationships
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