The concentration of creditors: Evidence from small businesses

Han, Liang, Storey, David J and Fraser, Stuart (2008) The concentration of creditors: Evidence from small businesses. Applied Financial Economics, 18 (20). pp. 1647-1656. ISSN 09603107

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Abstract

This article examines the determinants of concentration of creditors. The empirical evidence drawn from this article supports the proposition of Bolton and Scharfstein (1996) that for negotiation reasons, high-quality borrowers tend to borrow from multiple sources and is contrary to the theoretical prediction of Bris and Welch (2005). This finding implies the existence of hold-up problems in financing small businesses where information conveyance is difficult between lenders. It is further supported by the evidence that dispersed bank relationships are associated with relationships of a longer history and a closer physical distance to lenders.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Depositing User: David Storey
Date Deposited: 06 Feb 2012 21:03
Last Modified: 26 Mar 2012 08:04
URI: http://sro.sussex.ac.uk/id/eprint/29309
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