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ARTÍCULO
TITULO

Banking Consolidation and Bank-Firm Credit Relationships: the Role of Geographical Features and Relationship Characteristics

Enrico Beretta    
Silvia Del Prete    

Resumen

Using data on bank credit relationships, the paper shows that after a merger or an acquisition involving two or more banks which had previously jointly financed the same firm, the share of credit granted to the client by the consolidated intermediaries moderately decreases over three years. This does not necessarily imply a reduction of the overall credit granted to the firm, because after mergers and acquisitions the probability of diversifying the mix of lenders increases. A geographical closeness between bank and firm, or a membership of the firm in an industrial district, by reducing information asymmetries and the cost of soft information, seem to mitigate or offset the decrease in the share of credit provided by consolidated banks. By contrast, if a firm is in financial distress or located in the South of Italy, diversification is significantly enhanced.

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