This paper investigates the matching between banks and firms in the loan market. We estimate a many-to-one two-sided matching model using the Fox (2010) matching maximum score estimator. Using data on the U.S. loan market from 2000 to 2003, we find evidence of positive assortative matching of...

Empirical work on bank loans typically regresses loan spreads (markups of loan interest rates over a benchmark rate) on observed characteristics of banks, firms, and loans. The estimation is problematic when some of these characteristics are only partially observed and the matching of banks and...