Publication detail

Relationship Lending, Firms’ Behaviour and Credit Risk: Evidence from the Czech Republic

Author(s): doc. PhDr. Adam Geršl Ph.D.,
doc. PhDr. Ing. Ing. Petr Jakubík Ph.D. Ph.D.,
Type: IES Working Papers
Year: 2010
Number: 22
ISSN / ISBN:
Published in: IES Working Papers 22/2010
Publishing place: Prague
Keywords: relationship banking; credit risk
JEL codes: G21, G32
Suggested Citation: Geršl, A., Jakubík, P. (2010). “Relationship Lending, Firms’ Behaviour and Credit Risk: Evidence from the Czech Republic” IES Working Paper 22/2010. IES FSV. Charles University.
Grants: GACR 403/10/1235 (2010-2014) Institutional Responses to Financial Market Failures GAUK 2009/47509 Decomposition of securities' market prices into risk parameters IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: This paper presents the results of an analysis of data on individual bank loans of non-financial corporations in the Czech Republic taken from the CNB’s Central Credit Register. It focuses on the question of how firms obtain financing from domestic banks. The results show that the vast majority of non-financial corporations use the services of just one relationship lender. Small and young firms in technology- and knowledge-intensive industries tend to concentrate their credit needs in a single bank, whereas less creditworthy firms and firms in cyclical industries tend to borrow from more than one bank. The analysis also reveals different behaviour of firms towards financing banks in case of multiple lenders. Finally, the paper shows that the level of credit risk at bank level decreases in line with the extent to which firms applying single relationship lending occur in the bank’s portfolio.
Downloadable: WP 2010_22_Gersl, Jakubik

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