P. Angelini et al., AVAILABILITY AND COST OF CREDIT FOR SMALL BUSINESSES - CUSTOMER RELATIONSHIPS AND CREDIT COOPERATIVES, Journal of banking & finance, 22(6-8), 1998, pp. 925-954
The paper investigates the effects of bank-firm relationships on the c
ost and the availability of credit for a sample of small Italian firms
, focusing on possible differential effects related to the local and/o
r cooperative nature of lending banks, We find that with banks other t
han cooperative banks, lending rates tend to increase with the length
of the relationship for all customers, whereas with local cooperative
banks (CCBs) this is the case for non-member customers only; by contra
st, long-standing relationships have no significant effect on lending
rates for CCBs' own members. This evidence is in line with bank captur
e theories, which may not apply to CCB members. We also find that CCB
members enjoy easier access to credit, unlike non-member customers. Ou
r results indicate that the main distinctive features of CCBs relative
to commercial banks stem from their cooperative ownership rather than
their local nature. (C) 1998 Elsevier Science B.V. All rights reserve
d.