Creditor Concentration: An Empirical Investigation

48 Pages Posted: 11 Sep 2007 Last revised: 8 Nov 2011

See all articles by Steven Ongena

Steven Ongena

University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)

Gunseli Tumer-Alkan

VU Amsterdam; Vrije Universiteit Amsterdam, School of Business and Economics

Natalja von Westernhagen

Deutsche Bundesbank

Multiple version iconThere are 2 versions of this paper

Date Written: November 8, 2011

Abstract

Most of the literature on multiple banking assumes equal financing shares. However, unequal, asymmetric or concentrated bank borrowing is widespread, and creditor concentration is only weakly correlated with the number of bank relationships. This paper therefore investigates the determinants of creditor concentration for German firms using a comprehensive firm-bank level dataset for the time period between 1993 and 2003. We document that corporate borrowing from banks is very often concentrated, even for the largest firms in our sample. Leveraged firms and firms with more redeployable assets concentrate their borrowing from banks, as are firms dealing with a relationship lender that is profitable, that has lower monitoring costs, or that operates in a concentrated regional lending market.

Keywords: bank relationships, asymmetric financing, banking competition

JEL Classification: G21, G32, G33

Suggested Citation

Ongena, Steven R. G. and Tumer-Alkan, Gunseli and Tumer-Alkan, Gunseli and von Westernhagen, Natalja, Creditor Concentration: An Empirical Investigation (November 8, 2011). Available at SSRN: https://ssrn.com/abstract=1010353 or http://dx.doi.org/10.2139/ssrn.1010353

Steven R. G. Ongena

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

NTNU Business School ( email )

Norway

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Gunseli Tumer-Alkan (Contact Author)

VU Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands
+31 20 5987430 (Phone)

HOME PAGE: http://https://personal.vu.nl/g.tumeralkan/

Natalja Von Westernhagen

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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