Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina

Autores
Streb, Jorge Miguel; Bolzico, Javier Alberto; Druck, Pablo; Henke, Alejandro; Rutman, José Isaac; Sosa Escudero, Walter
Año de publicación
2002
Idioma
inglés
Tipo de recurso
documento de conferencia
Estado
versión publicada
Descripción
The paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.
Departamento de Economía
Materia
Economía
Argentina
banco
sistema bancario
economía monetaria
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by/3.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/3725

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network_name_str SEDICI (UNLP)
spelling Bank relationships: effect on the availability and marginal cost of credit for firms in ArgentinaStreb, Jorge MiguelBolzico, Javier AlbertoDruck, PabloHenke, AlejandroRutman, José IsaacSosa Escudero, WalterEconomíaArgentinabancosistema bancarioeconomía monetariaThe paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.Departamento de Economía2002-05info:eu-repo/semantics/conferenceObjectinfo:eu-repo/semantics/publishedVersionObjeto de conferenciahttp://purl.org/coar/resource_type/c_5794info:ar-repo/semantics/documentoDeConferenciaapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/3725enginfo:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/jemi/2002/trabajo8.pdfinfo:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/3.0/Creative Commons Attribution 3.0 Unported (CC BY 3.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-03T10:22:10Zoai:sedici.unlp.edu.ar:10915/3725Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-03 10:22:11.149SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
title Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
spellingShingle Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
Streb, Jorge Miguel
Economía
Argentina
banco
sistema bancario
economía monetaria
title_short Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
title_full Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
title_fullStr Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
title_full_unstemmed Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
title_sort Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina
dc.creator.none.fl_str_mv Streb, Jorge Miguel
Bolzico, Javier Alberto
Druck, Pablo
Henke, Alejandro
Rutman, José Isaac
Sosa Escudero, Walter
author Streb, Jorge Miguel
author_facet Streb, Jorge Miguel
Bolzico, Javier Alberto
Druck, Pablo
Henke, Alejandro
Rutman, José Isaac
Sosa Escudero, Walter
author_role author
author2 Bolzico, Javier Alberto
Druck, Pablo
Henke, Alejandro
Rutman, José Isaac
Sosa Escudero, Walter
author2_role author
author
author
author
author
dc.subject.none.fl_str_mv Economía
Argentina
banco
sistema bancario
economía monetaria
topic Economía
Argentina
banco
sistema bancario
economía monetaria
dc.description.none.fl_txt_mv The paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.
Departamento de Economía
description The paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.
publishDate 2002
dc.date.none.fl_str_mv 2002-05
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Creative Commons Attribution 3.0 Unported (CC BY 3.0)
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by/3.0/
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repository.name.fl_str_mv SEDICI (UNLP) - Universidad Nacional de La Plata
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