Chapter 14

What Determines the Choice of Being Multiple- Banked? Evidence from Italian Small Businesses

Mariarosaria Agostino, Sabrina Ruberto and Francesco Trivieri

Abstract

Taking advantage of a unique panel of small and medium-sized manufacturing firms observed from 1998 to 2006, this work investigates the determinants of multiple lending relationships in a country where small businesses are the heart of the productive structure. Our results suggest that larger, more indebted and innovative firms tend to be more inclined to establish multiple relationships. Conversely, closer ties with a main bank seem decreasing the propensity to be multiple-banked. Finally, we detect some persistence in the number of relationships, presumably due to switching costs.

Total Pages: 209-228 (20)

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