This paper focuses on the economic impact of the lender–borrower relationship on loan interest rates and tests whether repeated bank-firm contact significantly reduces these rates. We find strong evidence of the ‘relationship intensity’ hypothesis, and we detect a contribution of physical contact between banks and firms to loan pricing, controlling for the location where contact occurs. Finally, we report new evidence on the hold-up problem; in particular, we find that under certain circumstances, a closer relationship may alleviate extra borrowing costs.

Gabbi, G., Giammarino, M., Matthias, M., Monferra', S., Sampagnaro, G., Does face-to-face contact matter? Evidence on loan pricing, <<EUROPEAN JOURNAL OF FINANCE>>, 2019; 26 (7-8): 820-836. [doi:10.1080/1351847X.2019.1703023] [https://hdl.handle.net/10807/171327]

Does face-to-face contact matter? Evidence on loan pricing

Monferra', Stefano;
2020

Abstract

This paper focuses on the economic impact of the lender–borrower relationship on loan interest rates and tests whether repeated bank-firm contact significantly reduces these rates. We find strong evidence of the ‘relationship intensity’ hypothesis, and we detect a contribution of physical contact between banks and firms to loan pricing, controlling for the location where contact occurs. Finally, we report new evidence on the hold-up problem; in particular, we find that under certain circumstances, a closer relationship may alleviate extra borrowing costs.
2020
Inglese
Gabbi, G., Giammarino, M., Matthias, M., Monferra', S., Sampagnaro, G., Does face-to-face contact matter? Evidence on loan pricing, <<EUROPEAN JOURNAL OF FINANCE>>, 2019; 26 (7-8): 820-836. [doi:10.1080/1351847X.2019.1703023] [https://hdl.handle.net/10807/171327]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/171327
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