WebApr 6, 2024 · Abstract. We investigate the role of physical distance in corporate lending by exploiting infrastructure improvements as shocks to travel time. Lower travel time increases the likelihood of initiating a new banking relationship, consistent with an economic surplus from lower transaction costs. In existing lending relationships, banks capture ... Webprivate information, and existing lending relationships affect a bank’s and its customers’ decision to transact. Despite the high cost of gathering and processing information for loan applications by small firms, the distance between banks and small-business borrowers has steadily increased in recent times (Petersen and Rajan, 2002).

Private Debt: A Lesser-Known Corner Of Finance Finds The Spotlight

Webfinding is consistent with the notion that banks mistrust their private information as distance increases and further points to its local nature. Our main contribution … WebAug 15, 2016 · We study the effects of physical distance on the acquisition and use of private information in informationally opaque credit markets. Using a unique data set of … heather erickson tkda

Distance and Private Information in Lending - DeepDyve

WebDec 17, 2002 · The distance between small firms and their lenders is increasing, and they are communicating in more impersonal ways. After documenting these systematic changes, we demonstrate they do not arise from small firms locating differently, consolidation in the banking industry, or biases in the sample. Webdistance for each loan. We begin by documenting new empirical facts about small business lending. In the past two decades, the share of very distant small business loans (e.g. … WebThis study aims to examine whether branch-firm distance, branch-headquarter distance and local bank competition affect bank lending in China. By incorporating loan … heather erickson realtor ct