Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212800 
Year of Publication: 
2014
Series/Report no.: 
BOFIT Discussion Papers No. 14/2014
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
Using a novel way to identify relationship and transaction banks, we study how banks' lending techniques affect funding to SMEs over the business cycle. For 21 countries we link the lending techniques that banks use in the direct vicinity of firms to these firms' credit constraints at two contrasting points of the business cycle. We show that relationship lending alleviates credit constraints during a cyclical downturn but not during a boom period. The positive impact of relationship lending in an economic downturn is strongest for smaller and more opaque firms and in regions where the downturn is more severe.
JEL: 
F36
G21
L26
O12
O16
Persistent Identifier of the first edition: 
ISBN: 
978-952-6699-87-5
Document Type: 
Working Paper

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