The Number of Banking Relationships and the Business Cycle: New Evidence from Colombia

Posted: 13 Mar 2012 Last revised: 9 Sep 2015

See all articles by Jose E Gomez-Gonzalez

Jose E Gomez-Gonzalez

Banco de la Republica

Nidia Ruth Reyes

Universidad Externado de Colombia - Business Administration

Date Written: March 12, 2012

Abstract

We study the determinants of multiple bank-firm relationships using a uniquely rich data set comprised of information on individual loans of a large number of firms in Colombia. We control for firm-specific variables and find that the business cycle exerts important influence on the number of bank relationships sustained by firms. Our evidence suggests that the number of bank relationships is counter-cyclical, decreasing during macroeconomic expansions and increasing during contractions. However, this effect is stronger for large firms which have more access to alternative sources of funding.

Keywords: Banks, Bank relationships, Count-data models

JEL Classification: G20, G21, C40

Suggested Citation

Gomez-Gonzalez, Jose Eduardo and Reyes, Nidia Ruth, The Number of Banking Relationships and the Business Cycle: New Evidence from Colombia (March 12, 2012). Economic Systems, Vol. 35, No. 3, 2011, Available at SSRN: https://ssrn.com/abstract=2020321

Jose Eduardo Gomez-Gonzalez (Contact Author)

Banco de la Republica ( email )

Carrera 7 #14-78
Bogota
Colombia

Nidia Ruth Reyes

Universidad Externado de Colombia - Business Administration ( email )

Calle 12 0 83
Bogota D.C, Cundinamarca 3456
Colombia

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