Bank Lending Networks, Experience, Reputation, and Borrowing Costs: Empirical Evidence from the French Syndicated Lending Market

28 Pages Posted: 3 Mar 2012

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

Bulat Sanditov

Maastricht University

Thierry Burger‐Helmchen

affiliation not provided to SSRN

Date Written: January/February 2012

Abstract

We investigate the network structure of bank lending markets and evaluate the impact of lenders' network centrality, considered a measure of their experience and reputation, on borrowing costs. We show that the French market for syndicated bank loans is a ‘small world’ characterized by large local density and short social distances between lenders. Such a network structure allows for better information and resources flows between banks thus enhancing their social captial. We then show that lenders' experience and reputation play a significant role in reducing loan spreads and thus increasing borrower's wealth.

Keywords: bank lending, experience, loan syndication, reputation, social network analysis

Suggested Citation

Godlewski, Christophe J. and Sanditov, Bulat and Burger‐Helmchen, Thierry, Bank Lending Networks, Experience, Reputation, and Borrowing Costs: Empirical Evidence from the French Syndicated Lending Market (January/February 2012). Journal of Business Finance & Accounting, Vol. 39, Issue 1‐2, pp. 113-140, 2012. Available at SSRN: https://ssrn.com/abstract=2015146 or http://dx.doi.org/10.1111/j.1468-5957.2011.02269.x

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/

Bulat Sanditov

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Thierry Burger‐Helmchen

affiliation not provided to SSRN

No Address Available

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