This paper studies loan conditions when firms switch banks. Recent theoretical work on bank-firm relationships motivates our matching models. The dynamic cycle of the loan rate that we uncover is as follows: a loan granted by a new (outside) bank carries a loan rate that is significantly lower...

We study the effect of the integration in interbank markets on the interest rates that are charged on bank loans granted to individual firms. We account for banking sector competition and the selection that arises in the loan request and approval process. We use a comprehensive data set that...

We identify the impact of short-term interest rates on credit risk-taking by analyzing a comprehensive credit register from Spain, a country where for the last twenty years monetary policy was mostly decided abroad. Discrete choice, within borrower comparison and duration analyses show that...

We investigate the determinants of multiple-bank relationships using a new data set comprised of 1079 firms across twenty European countries. We document large cross-country variation in the average number of bank relationships per firm, uncovering a richness in European financial systems that...

An extensive empirical literature has documented the positive growth effects of equity market liberalization. However, this line of research ignores the impact of financial integration on a category of firms crucial for economic development, i.e., the small entrepreneurial firms. This paper aims...

How do banks react to increased interbank 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 - and bank industry specialization. We empirically investigate the...

This paper reviews the theoretical and empirical literature on bank relationships. We begin with a the event study evidence on bank loan announcements and trace our way forward through an overview of papers discussing the benefits and costs of bank relationships. We follow with a review of the...

We study the effect of bank loan announcements on the borrowing firms' bond and equity prices. Our sample consists of 896 loan deals signed between 1997 to 2003 involving 364 different U.S. firms. We report the first comprehensive evidence that also firm bond prices react to bank loan...

While the positive growth effects of financial integration are extensively documented, little is known of its impact on small and young firms. This paper aims to fill this void relying on a panel of 60,000 firm-year observations on listed and unlisted companies in Eastern European economies to...

We survey the extant literature on the effects of both a bank's organizational structure and the physical distance separating it from the lender on lending decisions. Banks do engage in spatial pricing, where the underlying mechanism can be both transportation costs and information asymmetries....