What Determines the Choice of Being Multiple- Banked? Evidence from Italian Small Businesses
Pp. 209-228 (20)
Mariarosaria Agostino, Sabrina Ruberto and Francesco Trivieri
Taking advantage of a unique panel of small and medium-sized manufacturing
firms observed from 1998 to 2006, this work investigates the determinants of multiple
lending relationships in a country where small businesses are the heart of the productive
structure. Our results suggest that larger, more indebted and innovative firms tend to be
more inclined to establish multiple relationships. Conversely, closer ties with a main
bank seem decreasing the propensity to be multiple-banked. Finally, we detect some
persistence in the number of relationships, presumably due to switching costs.
Hold-up problem, Italian small business, liquidity risk, managerial
skills, multinomial logit model, multiple banking relationships, reputation, small
and medium-sized firms, soft budget constraint problem, switching costs.
Department of Economics, Statistics and Finance, University of Calabria, Ponte Pietro Bucci, Cubo 1C, 87036 Arcavacata di Rende (CS), Italy.