The Concentration of Creditors: Evidence from Small Businesses

Han, Liang and Storey, David J and Fraser, Stuart (2008) The Concentration of Creditors: Evidence from Small Businesses. Applied Financial Economics, 18 (20). pp. 1647-1656.

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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
Subjects: H Social Sciences > HF Commerce
Divisions: Schools and Research Institutes > Business School > Business and Human Resource Management
Research Priority Areas: Applied Business Research
Depositing User: Ineke Tijsma
Date Deposited: 25 Mar 2015 15:55
Last Modified: 25 Mar 2015 15:56
URI: http://eprints.glos.ac.uk/id/eprint/1531

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