Credit Rationing, Customer Relationship and the Number of Banks : An Empirical Analysis

The recent important transformations of the banking sector, especially through numerous mergers and acquisitions, both in Europe and in the USA, have raised serious concerns for the financing of small business firms (SBF). Indeed, SBF are known to be heavily dependent of this financing channel but to be rather opaque. It has been long thought that bank classically solved this problem by developing long term customer relationship with its customers. But will the new large banks born from the current restructuration process be able to continue to play this role? If not, what strategy should develop SBF to compose their banks' pool in order to avoid as much as possible credit rationing? These questions are at the hearth of our analysis. We show that there is no unique rule: all depends on the degree of SBF opacity and the kind of bank the SBF are working with