The role of culture in firm-bank matching
Journal
Journal of Financial Intermediation
ISSN
1042-9573
Type
journal article
Date Issued
2023-01
Author(s)
Antonio Accetturo
;
Giorgia Barboni
;
Michele Cascarano
;
Garcia-appendini Emilia
Abstract
We assemble a unique dataset containing population-level information on loan applications in a region hosting two cultural groups to study the role of culture in firm borrowing decisions. We find that firms are more likely to apply for loans from culturally close banks. This effect is stronger for opaque firms, but not for less performing firms, indicating that firms do not expect preferential treatment from same-culture banks. Loan applications to culturally distant banks increase sharply with firms’ size and age, suggesting a role of information asymmetry in firm-bank matching. In contrast, we find no effect of cultural proximity on loan supply. Overall, our results show that demand-side factors play a key role in the formation of same-culture lending relationships.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier BV
Volume
53
Subject(s)
Division(s)