Ghosh, Saibal (2007): Relationship Lending and Financing Constraints: Firm-Level Evidence for India.
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Using a panel dataset of over 800 listed manufacturing firms for 1995-2005, the paper examines whether bank-firm relationships influence a firm’s financing constraints. The results indicate that a firm with fewer related banks maintains less cash and its equivalents even in the presence of potential investment opportunities. This suggests that establishing a close loan relationship with few banks could reduce the cost of private loans, enabling the firm to maintain lower liquidity levels. The analysis concludes with several robustness checks of the baseline results.
|Item Type:||MPRA Paper|
|Original Title:||Relationship Lending and Financing Constraints: Firm-Level Evidence for India|
|Keywords:||investment; financing constraints; bank-firm relationship; India|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity|
|Depositing User:||Saibal Ghosh|
|Date Deposited:||06. Aug 2010 10:29|
|Last Modified:||16. Feb 2013 01:58|
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