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Bank market concentration, relationship banking and small business liquidity

Research output: Contribution to journalArticlepeer-review

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Bank market concentration, relationship banking and small business liquidity. / Han, Liang; Zhang, Song; Greene, Francis J.

In: International Small Business Journal, Vol. 35, No. 4, 2017, p. 365-384.

Research output: Contribution to journalArticlepeer-review

Harvard

Han, L, Zhang, S & Greene, FJ 2017, 'Bank market concentration, relationship banking and small business liquidity', International Small Business Journal, vol. 35, no. 4, pp. 365-384. https://doi.org/10.1177/0266242615618733

APA

Han, L., Zhang, S., & Greene, F. J. (2017). Bank market concentration, relationship banking and small business liquidity. International Small Business Journal, 35(4), 365-384. https://doi.org/10.1177/0266242615618733

Vancouver

Han L, Zhang S, Greene FJ. Bank market concentration, relationship banking and small business liquidity. International Small Business Journal. 2017;35(4):365-384. https://doi.org/10.1177/0266242615618733

Author

Han, Liang ; Zhang, Song ; Greene, Francis J. / Bank market concentration, relationship banking and small business liquidity. In: International Small Business Journal. 2017 ; Vol. 35, No. 4. pp. 365-384.

Bibtex

@article{0c24252be8504f25bc1cabf48d93d7be,
title = "Bank market concentration, relationship banking and small business liquidity",
abstract = "This paper examines two contrasting interpretations of how bank market concentration (Market Power Hypothesis) and banking relationships (Information Hypothesis) affect three sources of small firm liquidity (cash, lines of credit and trade credit). Supportive of a market power interpretation, we find that in a highly concentrated banking market, small firms hold less cash, have less access to lines of credit, and are more likely to be financially constrained, use greater amounts of more expensive trade credit and face higher penalties for trade credit late payment. We also find support for the information hypothesis: relationship banking improves small business liquidity, particularly in a concentrated banking market, thereby mitigating the adverse effects of bank market concentration derived from market power. Our results are robust to different cash, lines of credit and trade credit measures and to alternative empirical approaches.",
keywords = "bank market concentration, market power, relationship banking, small firm liquidity",
author = "Liang Han and Song Zhang and Greene, {Francis J.}",
year = "2017",
doi = "10.1177/0266242615618733",
language = "English",
volume = "35",
pages = "365--384",
journal = "International Small Business Journal",
issn = "0266-2426",
publisher = "SAGE Publications Inc.",
number = "4",

}

RIS

TY - JOUR

T1 - Bank market concentration, relationship banking and small business liquidity

AU - Han, Liang

AU - Zhang, Song

AU - Greene, Francis J.

PY - 2017

Y1 - 2017

N2 - This paper examines two contrasting interpretations of how bank market concentration (Market Power Hypothesis) and banking relationships (Information Hypothesis) affect three sources of small firm liquidity (cash, lines of credit and trade credit). Supportive of a market power interpretation, we find that in a highly concentrated banking market, small firms hold less cash, have less access to lines of credit, and are more likely to be financially constrained, use greater amounts of more expensive trade credit and face higher penalties for trade credit late payment. We also find support for the information hypothesis: relationship banking improves small business liquidity, particularly in a concentrated banking market, thereby mitigating the adverse effects of bank market concentration derived from market power. Our results are robust to different cash, lines of credit and trade credit measures and to alternative empirical approaches.

AB - This paper examines two contrasting interpretations of how bank market concentration (Market Power Hypothesis) and banking relationships (Information Hypothesis) affect three sources of small firm liquidity (cash, lines of credit and trade credit). Supportive of a market power interpretation, we find that in a highly concentrated banking market, small firms hold less cash, have less access to lines of credit, and are more likely to be financially constrained, use greater amounts of more expensive trade credit and face higher penalties for trade credit late payment. We also find support for the information hypothesis: relationship banking improves small business liquidity, particularly in a concentrated banking market, thereby mitigating the adverse effects of bank market concentration derived from market power. Our results are robust to different cash, lines of credit and trade credit measures and to alternative empirical approaches.

KW - bank market concentration

KW - market power

KW - relationship banking

KW - small firm liquidity

U2 - 10.1177/0266242615618733

DO - 10.1177/0266242615618733

M3 - Article

VL - 35

SP - 365

EP - 384

JO - International Small Business Journal

JF - International Small Business Journal

SN - 0266-2426

IS - 4

ER -

ID: 3258984