The duration of bank relationships

We analyze the duration of bank relationships using a unique panel data set of listed firms and their banks from the bank-dominated Norwegian market. We find that firms are more likely to leave a bank as the relationship matu res. Small, profitable, and highly leveraged firms maintain shorter bank re lationships, as do firms with multiple bank relationships. These findings a re robust to censoring, alternate specifications for the distribution of re lationship duration, and other control variables relevant to the Norwegian market. Overall., our results cast doubt on theories suggesting that firms become locked into bank relationships. (C) 2001 Published by Elsevier Scien ce S.A.