Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information about a firm's type to its competitors. Thereby,...

In a relatively recent paper, Gehrig and Stenbacka (Eur Econ Rev 51, 77–99, 2007) show that information sharing increases banks’ profits to the detriment of creditworthy entrepreneurs in a model of a banking duopoly with switching costs and poaching. They restrict their analysis to the case...

We investigate how bankers use private information to help borrowers combine resources in strategic alliances. Firms that have borrowed from the same banker are significantly more likely to enter an alliance. Even indirect connections through a banker network can facilitate alliances. Consistent...

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information about a firm's type to its competitors. Thereby,...

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information about a firm’s type to its competitors. Thereby,...

I address the following issue in this paper: how does information sharing among banks about borrowers affect banks' competition, and ultimately, the interest rate borrowers pay for the loan they take? One would expect that full information sharing among banks reduces lenders' risk and results in...

This paper analyzes the effects of the way information is produced and transmitted through an organizational structure on the business dynamics of a firm. Specifically, I study its effects on the agency problem, concluding that it proves to be an efficient and effective solution to overcome the...

We exploit contract-level data on approved and rejected small-business loans to assess the impact of a new credit registry in Bosnia and Herzegovina. Our findings are threefold. First, mandatory information sharing tightens lending at the extensive margin as loan officers reject more...

We exploit detailed data on approved and rejected small business loans to assess the impact of the introduction of a credit registry in Bosnia and Herzegovina. Our findings are threefold. First, mandatory information sharing tightens lending at the extensive margin as more applications are...

We exploit contract-level data from Bosnia and Herzegovina to assess the impact of a new credit registry on the use of borrower collateral versus third-party guarantees. Among first-time borrowers, the introduction of mandatory information sharing leads to a shift from collateral to guarantees,...