Journal of Accounting and Economics Vol. 66 No. 1 2018
Does credit reporting lead to a decline in relationship lending? Evidence from information sharing technology
Abstract
I examine how credit reporting affects where firms access credit and how lenders contract with them. I use within firm-time and lender-time tests that exploit lenders joining a credit bureau and sharing information in a staggered pattern. I find information sharing reduces relationship-switching costs, particularly for firms that are young, small, or have had no defaults. After sharing, lenders transition away from relationship contracting, in two ways: contract maturities in new relationships are shorter, and lenders are less willing to provide financing to their delinquent borrowers. My results highlight the mixed effects of transparency-improving financial technologies on credit availability.
- DOI
- 10.1016/j.jacceco.2018.03.002
- Volume
- 66
- Issue
- 1
- Pages
- 123-141
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref