Journal
JOURNAL OF BANKING & FINANCE
Volume 25, Issue 12, Pages 2127-2167Publisher
ELSEVIER
DOI: 10.1016/S0378-4266(01)00189-3
Keywords
banks; mergers; foreign ownership; financial distress; multiple lenders
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We test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms using a rich new data set on Argentinean banks, firms, and loans. We also test hypotheses about borrowing from a single bank versus multiple banks. Our results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms. Bank distress appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, raising borrowing costs and destroying some relationship benefits. (C) 2001 Published by Elsevier Science B.V.
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