Does banking relationship configuration affect the risk-taking behavior of French SMEs? - Archive ouverte HAL Access content directly
Journal Articles Economics and Business Letters Year : 2015

Does banking relationship configuration affect the risk-taking behavior of French SMEs?

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Abstract

Using a new and unique dataset dealing with French small and medium-sized enterprise (SME) financing that provides detailed information about 1 116 firm-bank relationships, we test how the number of banks with which a firm works and the organizational structure of its main bank influence its risk-taking behavior. We find evidence that SMEs engaged with a decentralized main bank (a local or mutual one) invest in less risky projects, especially when they work with fewer than three banks (one or two). We also find evidence that single-bank SMEs engaged with a centralized bank (a large or foreign one) take significantly more risks than the others.

Dates and versions

hal-01338638 , version 1 (28-06-2016)

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Ludovic Vigneron, Ramzi Benkraiem. Does banking relationship configuration affect the risk-taking behavior of French SMEs?. Economics and Business Letters, 2015, 4 (4), pp.166-174. ⟨10.17811/ebl.4.4.2015.166-174⟩. ⟨hal-01338638⟩
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