The Joint Size and Ownership Specialization in Banks' Lending

40 Pages Posted: 8 May 2006

See all articles by Javier Delgado

Javier Delgado

Banco de España

Jesus Saurina Salas

Banco de España

Vicente Salas-Fumás

University of Zaragoza - Department of Business Administration and Organization

Date Written: March 31, 2006

Abstract

In this paper we study the specialization of Spanish banks along two intertwined dimensions: size and ownership form. We find some interesting results at odds with the existing empirical literature. As commercial banks increase their size, they lend more to large borrowers but that is not the case for the largest banks. For savings banks, the larger the size the more likely is the lending to small borrowers. Moreover, we find evidence that larger commercial banks are more willing to lend to low credit quality borrowers than medium size banks, while the opposite is true among savings banks. Banks' specialization in lending to business firms seems to go across the reputation considerations, risk shifting behavior and lending technologies most often considered in the literature.

Keywords: bank specialization, transactional lending, relational lending, ownership form

JEL Classification: D23, G21

Suggested Citation

Delgado, Javier and Saurina Salas, Jesus and Salas-Fumás, Vicente, The Joint Size and Ownership Specialization in Banks' Lending (March 31, 2006). Banco de Espana Research Paper No. WP-0606. Available at SSRN: https://ssrn.com/abstract=901149 or http://dx.doi.org/10.2139/ssrn.901149

Javier Delgado (Contact Author)

Banco de España ( email )

Madrid 28014
Spain

Jesus Saurina Salas

Banco de España ( email )

Madrid 28014
Spain

Vicente Salas-Fumás

University of Zaragoza - Department of Business Administration and Organization ( email )

Dr. Cerrada 1
5005 Zaragoza
Spain
+34 976 761803 (Phone)

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