Determinants of Bank-Firm Lending Relationship: Human Capital Transfer Channel

42 Pages Posted: 17 Sep 2019 Last revised: 10 Feb 2020

See all articles by Lucy Chernykh

Lucy Chernykh

Clemson University

Sergey Mityakov

Florida State University - Department of Finance

Date Written: August 31, 2019

Abstract

We study the impact of human capital transfer from banks to non-financial firms on firms’ ability to borrow from banks. Using a unique, employee-employer matched dataset from Russia, we find that hiring an ex-banker increases a firm’s likelihood to secure a bank loan, and the effect is higher when a former bank manager is hired. By exploiting bank branches network restructuring as the source of exogenous shocks to the local supply of bank ex-employees, we establish that this relation is causal. Finally, we present evidence that, when transferring to non- financial firms, ex-bankers bring not only knowledge and connections from their former banks, but also lending-related expertise which is applicable outside of their banks.

Keywords: bank-firm lending relations, human capital transfer

JEL Classification: G21, G32, J24

Suggested Citation

Chernykh, Lucy and Mityakov, Sergey, Determinants of Bank-Firm Lending Relationship: Human Capital Transfer Channel (August 31, 2019). Available at SSRN: https://ssrn.com/abstract=3446114 or http://dx.doi.org/10.2139/ssrn.3446114

Lucy Chernykh

Clemson University ( email )

School of Accountancy and Finance
Clemson, SC 29634
United States

Sergey Mityakov (Contact Author)

Florida State University - Department of Finance ( email )

Tallahassee, FL 32306-1042
United States

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