I use the the fresh approach to 21 places colombiancupid reddit which have varying profile from economic and you can economic invention. That it not merely enhances the exterior authenticity out-of before results and allows us to exploit ranging from-country (in addition to inside-country) version in brand new prevalence off dating lending as well as the strength of one’s 2008–2009 economic downturn. In addition, by using company-level survey studies, we are able to differentiate ranging from financially unconstrained businesses, firms that was basically possibly rejected otherwise discouraged regarding obtaining an excellent financing, and organizations as opposed to borrowing consult. Studies using borrowing registry data face the possibility limitation one to low-applicant businesses possibly do not require borrowing from the bank, or they want credit but are annoyed of applying. Fundamentally, because of the taking a look at the character of matchmaking credit on the height and you will trough of your credit period, we could reveal that, given that forecast by the principle, matchmaking lending is more very important through the a good downturn. In spite of so it totally different empirical means, all of our efficiency fall into line really, and this solidify, earlier conclusions into the part off relationship financing during downturns.
About three methodological issues need opinion. But not, by using research for borrowing and you will low-borrowing agencies we can measure the regional general harmony effect of banks’ lending techniques, and that we could possibly miss if paying attention just on credit firms. Next, we rely on questionnaire research for both companies and you may banking companies. When you are organization-height questionnaire research was commonly used in the previous literary works (e.g., Campello mais aussi al., 2010, Popov and you will Udell, 2012, Ongena et al., 2013), concerns you will definitely occur in the measurement mistake into the firms’ answers in order to inquiries from the as to the reasons they do not make an application for a loan, otherwise you to getting rejected could just echo the possible lack of financial support potential which have positive websites establish worth. To help you decrease these types of concerns, we provide numerous robustness testing with different definitions off firms’ credit limitations, together with tips according to balance piece studies.
Third, our empirical approach hinges on the location off banking institutions and you may businesses are independent of any other. Adopting the Berger, Miller, Petersen, Ra), we assume that the brand new financial land near companies imposes an enthusiastic exogenous geographic limit on the banking institutions you to agencies have access to. You can expect good facts that’s in keeping with that it presumption. We plus attempt getting heterogeneous effects of neighborhood exposure out of financial institutions you to definitely view on their own since the relationship lenders round the different varieties of enterprises. Which subsequent address brand new you’ll endogenous coordinating of organizations and you will banks.
The fresh paper continues the following. Part 2 describes the details present we blend, and you can Part 3 gift ideas our very own empirical means. I discuss our very own standard efficiency and you may robustness examination in the Parts cuatro and 5, correspondingly. Point 6 up coming considers genuine outcomes, and you will Part 7 ends up.
Point snippets
Our empirical analysis rests to the joining three important bits of information: studies into the firms’ borrowing from the bank restrictions during the differing times, the brand new geo-coordinates of the lender branches related these companies, and you will studies on financing processes of these finance companies. I discuss the investigation into the firms’ actual results into the Point 6.
Methods
To estimate the link between the share of relationship banks near a firm and the probability that the firm is credit-constrained, we use the following model for both the 2005 and 2008–2009 cross section. We hypothesize that relationship banks were particularly helpful once the cycle had turned in 2008. Consider the model Y i j k l = ? 1 X i j k l + ? 2 L j k + ? 3 S h a r e r e l a t i o n s h i p b a n k s j k + ? 4 C k + ? 5 I l + ? i j k l , where Yijkl is a dummy variable equal to one if firm i in locality j of country k in industry l is