Concentration, Hold-Up, and Information Revelation in Bank Lending: Evidence From Chilean Firms
Abstract
In this paper we empirically study bank-client relationships using a sample of Chilean manufacturing firms. We examine whether concentration and the duration of bank-client relationships affect the volume of bank lending. Our results indicate that lower concentration, measured by the number of banks a firm borrows from, is associated ith a large and positive effect on borrowing. The length of borrower-lender relationships has a positive—although not always statistically significant—effect on the amount borrowed.
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