Previous studies argue that banks offer loans to informationally opaque businesses using relationship lending technology. Using survey data of small businesses in Japan, we show that informationally opaque and financially weak firms that do not have lending relationships use high interest rate...

Having a close relationship with a customer that accounts for a relatively high proportion of sales may be costly for small suppliers and weaken their bargaining power. Suppliers with a weak bargaining position may then find it difficult to reduce their provision of trade credit during a...