Lending concentration features prominently in models of information acquisition by banks, but empirical evidence on its role is limited because banks rarely disclose details about their exposures or information collection. Using a dataset of bank-level commercial loan exposures, we find banks...

This paper investigates whether the benefits of bank–borrower relationships differ depending on three factors identified in the theoretical literature: verifiability of information, bank size and complexity, and bank competition. We extend the current literature by analyzing how relationship...

Despite the importance of banks' role as delegated monitors, little is known about how non-price terms of loan contracts are structured to optimize information production in a lending relationship. Using a large sample of corporate loans, this paper examines the effect of relationship lending on...

We provide evidence that the presence of bankers in the board of directors reduce information asymmetry between credit markets and firms. We show that the impact of the presence of bankers on leverage is driven by firms with low level of debt. This effect is amplified the more connected the...

We empirically examine the impact of bank consolidation on bank acquisition of soft information about borrowers. Using a dataset of small business financing, we find that mergers of small banks have a negative impact on soft information acquisition, whereas mergers of large banks have no impact....

We find empirical evidence that pre-IPO relationships with commercial banks through lending and investment via their venture capital subsidiaries significantly reduces IPO underpricing, whereas the affiliation between a lead underwriter and venture backing the IPO company does not. We also...

We explore Lithuanian credit register data and two bank closures to provide a novel estimate of firms' bank-switching costs and a novel identification of the hold-up problem. We show that when a distressed bank's closure forced firms to switch, these firms started borrowing at lower interest...

Borrowers' reputation concerns makes communication of soft or non-verifiable information credible. We find that some misreporting of short-term information has costs as well as benefits. The costs are due to inefficient management of investments, while the benefits are due to the fact that some...

This paper studies the welfare impact of reputation/feedback systems in markets where both adverse selection and moral hazard are present. Using a transaction-level dataset from an online credit market, I estimate a dynamic model of borrowers and lenders, in which borrowers are subject to...

Small and medium-sized firms often obtain capital via a mixture of relationship and arm's-length bank lending. We show that such heterogeneous multiple bank financing leads to a lower probability of inefficient credit foreclosure than both monopoly relationship lending and homogeneous multiple...