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CFS Working Paper Series, Universität Frankfurt a. M. >
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http://hdl.handle.net/10419/43272
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| Title: | | Hold-up in multiple banking: Evidence from SME lending  |
| Authors: | | Brunner, Antje Krahnen, Jan Pieter |
| Issue Date: | | 2010 |
| Series/Report no.: | | CFS Working Paper 2010/07 |
| Abstract: | | This paper analyzes loan pricing when there is multiple banking and borrower distress. Using a unique data set on SME lending collected from major German banks, we can instrument for effective coordination between lenders, carrying out a panel estimation. The analysis allows to distinguish between rents that accrue due to single bank lending, rents that accrue due to relationship lending, and rents that accrue due to the elimination of competition among multiple lenders. We find the relationship lending to have no discernible impact on loan spreads, while both single lending and coordinated multiple lending significantly increase the spread. Thus, contrary to predictions in the literature, multiple lending does not insure the borrower against hold-up. |
| Subjects: | | Banking Competition Coordination Distress Credit Spread Hold-up |
| JEL: | | D74 G21 G33 G34 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CFS Working Paper Series, Universität Frankfurt a. M.
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