Relationship Banking Research Papers - Academia.edu (original) (raw)

To the public, all banks seem alike. But banking insiders make important distinctions between community banks and all other banks. Policymakers worry that community banks’ unique characteristics threaten their survival in the face of... more

To the public, all banks seem alike. But banking insiders make important distinctions between community banks and all other banks. Policymakers worry that community banks’ unique characteristics threaten their survival in the face of industry consolidation. However, despite dramatic regulatory and technological changes in the industry in the past two decades, community banks have not only survived but often prospered.

Relationship banking has emerged as an important mechanism through which banks, especially the smaller ones, overcome problems associated with information asymmetry. Relationship banking also creates value for the... more

Relationship banking has emerged as an important mechanism through which banks, especially the smaller ones, overcome problems associated with information asymmetry. Relationship banking also creates value for the borrowing firm through a number of channels such as more chances of loan
availability, lower interest rate, and less collateral requirements. In this paper, we provide an overview
of the recent literature on relationship banking and its impact on firm value. We also discuss different
dimensions of relationship banking to highlight how the role of relationship banking changes in information generation process under different circumstances. Finally, we identify potential areas for future research in this area.

The literature acknowledges commitment as fundamental for nourishing and sustaining B2B relationship. Notwithstanding this importance, commitment has some predicaments that surround its conceptualisation. Additionally, the domain of SMEs... more

The literature acknowledges commitment as fundamental for nourishing and sustaining B2B relationship. Notwithstanding this importance, commitment has some predicaments that surround its conceptualisation. Additionally, the domain of SMEs and bank relationship in Nigeria lacks both conceptual proposition and empirical investigation. Based on these, a critical review of the literature on commitment is undertaken and a proposed framework of commitment is defined and presented. This study supports theory development by presenting, assessing and validating an instrument that evaluates commitment and intention from the perspective of the service user in the specific B2B and geographical context. Validated scale sets from reviewed studies are combined to assess commitment. Data were collected from 199 SMEs via interviews with senior employees who have the most intimate knowledge of the SMEs' business relationships with their bank. Assessment involved exploratory factor analysis to determine underlying data structure, with internal reliability assessment of the identified factors. Commitment is established around two components; affective and calculative. The two-dimensional presentation of commitment is distinct. The originality and value of this paper is centred on the proposition and validation of a theoretical framework on commitment for this unique B2B context, thus extending and availing the concept into the Nigerian B2B relationship domain that is well under-represented in the literature.

In this paper, we seek empirical evidence for the costs of information monopolies in the syndicated loan market using a novel approach. Comparing borrowers with high and low switching costs, we find that undercapitalized banks charge... more

In this paper, we seek empirical evidence for the costs of information monopolies in the syndicated loan market using a novel approach. Comparing borrowers with high and low switching costs, we find that undercapitalized banks charge higher loan spreads for loans to firms facing high switching costs. This effect is shown to be statistically and economically significant. We find that information monopolies exist in periods when uncertainties in external capital markets are particularly high: Only weak banks raise their spreads above what is justified by credit risk for borrowers with high cost of switching lenders. This finding is consistent with reputation considerations and discretion in bank loan commitments. Ambiguity about borrower financial health, which induces the information monopoly in the first place, also triggers bank discretion. Well capitalized banks do not engage in monopoly pricing which enhances their reputation (and potentially increases future fee income). For wea...

In this paper we empirically study bank-client relationships using a sample of manufacturing Chilean firms. We examine whether concentration and the duration of bank-firm relationships affect the terms of bank financing, evaluating both... more

In this paper we empirically study bank-client relationships using a sample of manufacturing Chilean firms. We examine whether concentration and the duration of bank-firm relationships affect the terms of bank financing, evaluating both the volume of bank lending and bank loan costs. Our results indicate that lower concentration, measured by the number of banks a firm borrows from, is associated

Managing consumers' trust is a critical issue for most of the banks in Sri Lanka. Especially consumers' trust is very important determinant to enhance online banking relationship commitment. This research was focused on to explore the... more

Managing consumers' trust is a critical issue for most of the banks in Sri Lanka. Especially consumers' trust is very important determinant to enhance online banking relationship commitment. This research was focused on to explore the relationship between the key antecedents of (Communication, Opportunistic Behaviour, Security and Privacy) online customer trust in Sri Lankan context. Flowingly, the researcher focused to investigate how the trust impact on the online relationship commitment in Colombo District. The population was unknown the researcher was selected 384 respondents based on non-probability sampling method and under the convenience sampling the self-administered standard structured questionnaire was distributed through online to collect data for the study. The multiple and simple linear regression model results indicated the emails and other social media websites. The results of the study indicated that the communication, security and privacy have a positive and significant impact on consumers' trust in online banking transaction and Opportunistic behaviour has significant negative impact on consumer's trust and also finds higher perceived trust to enhance significantly customers' commitment in the online banking transaction. Findings of this study provide an implication for the Board of Directors should focus on the privacy of the online customers and also the security enhancement. Most importantly the bankers have to continuously expose the good side of the online services to the offline clients. In future researchers have to identify how trust is developed and sustained over different levels of customer relationships in online banking.

We examine the role played by Mutual Guarantee Institutions (MGIs) in the lending policies undertaken by banks at the peak of the Great Crisis of 2007–2009. We address this issue by using a large database on Italian firms built from the... more

We examine the role played by Mutual Guarantee Institutions (MGIs) in the lending policies undertaken by banks at the peak of the Great Crisis of 2007–2009. We address this issue by using a large database on Italian firms built from the credit files of UniCredit banking Group and focusing on small business. We provide an empirical analysis of the determinants of the probability that a borrowing firm will suffer financial tension and obtain two main innovative findings. First, we find that small firms supported by MGIs less likely experienced financial tensions even at that time of utmost financial stress. Second, our empirical evidence shows that MGIs played a signaling role beyond the simple provision of collateral. This latter finding suggests that the information provided by MGIs turned out to be key for bank–firm relations as scoring and rating systems – being typically based on pro-cyclical indicators – had become less informative during the crisis.

... plants/firms from five to seven sectors: auto parts, chemicals, construction materials, electronics ... variable is Lender Diversity, which measures the number of financial institutions from ... that maintain relatively concentrated... more

... plants/firms from five to seven sectors: auto parts, chemicals, construction materials, electronics ... variable is Lender Diversity, which measures the number of financial institutions from ... that maintain relatively concentrated borrowing tend to have lower leverage ratios (Degryse and ...

Managing consumers' trust is a critical issue for most of the banks in Sri Lanka. Especially consumers' trust is very important determinant to enhance online banking relationship commitment. This research was focused on to... more

Managing consumers' trust is a critical issue for most of the banks in Sri Lanka. Especially consumers' trust is very important determinant to enhance online banking relationship commitment. This research was focused on to explore the relationship between the key antecedents of (Communication, Opportunistic Behaviour, Security and Privacy) online customer trust in Sri Lankan context. Flowingly, the researcher focused to investigate how the trust impact on the online relationship commitment in Colombo District. The population was unknown the researcher was selected 384 respondents based on non-probability sampling method and under the convenience sampling the self-administered standard structured questionnaire was distributed through online to collect data for the study. The multiple and simple linear regression model results indicated the emails and other social media websites. The results of the study indicated that the communication, security and privacy have a positive and significant impact on consumers' trust in online banking transaction and Opportunistic behaviour has significant negative impact on consumer's trust and also finds higher perceived trust to enhance significantly customers' commitment in the online banking transaction. Findings of this study provide an implication for the Board of Directors should focus on the privacy of the online customers and also the security enhancement. Most importantly the bankers have to continuously expose the good side of the online services to the offline clients. In future researchers have to identify how trust is developed and sustained over different levels of customer relationships in online banking.

This paper looks at the role of commercial banks and investment banks as financial advisors. In their role as lenders and advisors, banks can be viewed as serving a certification function. However, banks acting as both lenders and... more

This paper looks at the role of commercial banks and investment banks as financial advisors. In their role as lenders and advisors, banks can be viewed as serving a certification function. However, banks acting as both lenders and advisors face a potential conflict of ...

This paper examines the impact of a public credit registry on the repayment behavior of borrowers. We implement an experimental credit market in which loan repayment is not third-party enforceable. We compare market outcome with a credit... more

This paper examines the impact of a public credit registry on the repayment behavior of borrowers. We implement an experimental credit market in which loan repayment is not third-party enforceable. We compare market outcome with a credit registry to that without a credit registry. This experiment is conducted for two market environments: first a market in which interactions between borrowers

In this paper we empirically study bank-client relationships using a sample of manufacturing Chilean firms. We examine whether concentration and the dura-tion of bank-firm relationships affect the terms of bank financing, evaluating both... more

In this paper we empirically study bank-client relationships using a sample of manufacturing Chilean firms. We examine whether concentration and the dura-tion of bank-firm relationships affect the terms of bank financing, evaluating both the volume of bank lending and bank ...

NOTE: this editor's introduction sketches a special issue of Business Horizons: A Saturday Evening Post editorial of December 28, 1928, glowingly described American bankers as the ‘‘stewards of our whole intricate credit system.’’ Within... more

NOTE: this editor's introduction sketches a special issue of Business Horizons:
A Saturday Evening Post editorial of December 28, 1928, glowingly described American bankers as the ‘‘stewards of our whole intricate credit system.’’ Within a year the feelings of that esteemed journal’s
editors had changed considerably. Their emotional rollercoaster follows tracks similar to those in any country, where views toward bankers and financiers are consistent in that they are entirely inconsistent.
Bankers are sometimes appreciated during economic growth, often reviled during economic downturns, and sometimes ignored altogether, but usually assumed to be in the midst of politics. At least this last feeling is more consistent over economic cycles, and it is the topic of this special issue of Business Horizons: The Politics of International
Banking and Finance.

This paper examines the impact of credit reporting on the repayment behavior of borrowers. We implement an experimental credit market in which loan repayment is not third-party enforceable. We then compare market outcome with a public... more

This paper examines the impact of credit reporting on the repayment behavior of borrowers. We implement an experimental credit market in which loan repayment is not third-party enforceable. We then compare market outcome with a public credit registry to that without a credit registry. This experiment is conducted for two market environments: first, a market in which repeat interaction between