Firm Failure and Relationship Lending: New Evidence from Small Businesses


  • Borradores de economía


  • We study the effect of relationship lending on small firms failure probabiliTY using a uniquely rich data set comprised of information on individual loans of a large number of small firms in Colombia. We control for firm-specific variables and find that small firms involved in long-term liaisons with commercial banks have a significantly lower probabiliTY of becoming bankrupt than otherwise identical firms not involved in a long-term credit relationship. We also find that small firms with multiple banking relationships face a lower failure hazard than otherwise identical firms involved in a unique long-term relationship.

fecha de publicación

  • 2011-01

Líneas de investigación

  • Bank Relationships
  • Firms
  • Survival Analysis


  • 638