Concentration, Hold-up, and Information Revelation in Bank Lending: Evidence from Chilean Firms
نویسندگان
چکیده
over time depends on the functioning of the financial system. Within this market, banks play a fundamental role as financial intermediaries, providing access to the payment system, transforming assets, managing risk, and monitoring and processing information (Freixas and Rochet, 1998). In this paper we empirically study the role of banks in overcoming the frictions that arise from asymmetric information. Specifically, we study the effects on the volume of firm borrowing of the relationships that firms and banks develop as a result of banks’ monitoring activities. Whenever a bank lends to a firm, the bank gathers information
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