Conference Paper
Bank orientation and industry specialization
Abstract: How do banks react to increased interbank competition? Recent banking theory offers conflicting predictions about the impact of competition on bank orientation - i.e., the choice of relationship based versus transactional banking - and bank industry specialization. We empirically investigate the impact of interbank competition on bank branch orientation and specialization. We employ a unique data set containing detailed information on bank-firm relationships and industry classification. We find that bank branches facing stiff local competition engage relatively more in relationship-based lending but specialize somewhat less in a particular industry. Our results illustrate that competition and relationships are not necessarily inimical.
Keywords: Banking market; Bank loans; Bank competition;
Status: Published in Conference on Bank Structure and Competition (2004 : 40th) ; How do banks compete? strategy, regulation, and technology
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Chicago
Part of Series: Proceedings
Publication Date: 2004
Number: 943
Pages: 412-427