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Journal of Banking & Finance Vol. 112 2020

Bank credit rates across the business cycle: Evidence from a French cooperative contracts database

Sébastien Dereeper1,2,3; Frédéric Lobez1,3; Jean-Christophe Statnik1,3

1 Université de Lille · 2 SKEMA Business School · 3 Lille School of Management Research Center

Abstract

Financial theory indicates that bank–firm relationships can induce a hold-up problem, resulting in higher interest rates. Yet only weak empirical confirmation of this result exists. Moreover, the potential influence of the business cycle on the bank–firm relationship still requires empirical consideration. With a unique contracts data set, collected from a French cooperative bank between 1996 and 2009, this study shows that the effects of bank–firm relationships on the credit rate depend on economic conditions and that the hold-up problem is at play only during economic recessions.

DOI
10.1016/j.jbankfin.2017.09.016
Volume
112
Pages
105220
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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