How Many Banks Does it Take to Lend? Empirical Evidence from Europe

42 Pages Posted: 29 Apr 2008

See all articles by Christophe J. Godlewski

Christophe J. Godlewski

University of Strasbourg - Faculty of Law and Business; EM Strasbourg Business School; LaRGE Research Center

Ydriss Ziane

University of Angers - Bureau of Economic Theory and Application (BETA)

Date Written: 2008

Abstract

We provide empirical evidence on the determinants of the number of bank lenders using a sample of more than 3000 loans to firms from 24 European countries. Our testable hypotheses are built upon different theoretical frameworks drawn from the existing literature, referring to firm characteristics, strategic considerations, geographical distances, bank market concentration, efficiency of legal system, and development of alternative sources of funds. Our main results show that the number and the international diversity of lenders is increased by loan and firm characteristics which reduce agency costs, and by financial structure and legal environment characteristics which mitigate expropriation risk.

Keywords: Lending relationships, number of lenders, bank loans, financial governance, asymmetric information, Europe

JEL Classification: G21, G32, G33

Suggested Citation

Godlewski, Christophe J. and Ziane, Ydriss, How Many Banks Does it Take to Lend? Empirical Evidence from Europe (2008). Available at SSRN: https://ssrn.com/abstract=1126397 or http://dx.doi.org/10.2139/ssrn.1126397

Christophe J. Godlewski (Contact Author)

University of Strasbourg - Faculty of Law and Business ( email )

1 place d'Athènes
Strasbourg, 67000
France

HOME PAGE: http://droit.unistra.fr/

EM Strasbourg Business School ( email )

61 Avenue de la Forêt Noire
Strasbourg, 67000
France

HOME PAGE: http://www.em-strasbourg.eu/

LaRGE Research Center ( email )

1 place d'Athènes
Strasbourg, 67000
France

HOME PAGE: http://droit.unistra.fr/

Ydriss Ziane

University of Angers - Bureau of Economic Theory and Application (BETA) ( email )

13, Place Carnot
Strasbourg, 67000
France

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