Template-Type: ReDIF-Paper 1.0

Author-Name: Palma Filep-Mosberger
Author-X-Name-First: Palma
Author-X-Name-Last: Filep-Mosberger
Author-Email: mosbergerp@mnb.hu
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)

Author-Name: Attila Lindner
Author-X-Name-First: Attila
Author-X-Name-Last: Lindner
Author-Email: a.lindner@ucl.ac.uk
Author-Workplace-Name: University College London, MTA KTI

Author-Name: Judit Rariga
Author-X-Name-First: Judit
Author-X-Name-Last: Rariga
Author-Email: rarigaj@mnb.hu
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)


Title: Spillover Effects in Firms' Bank Choice
Abstract: In this paper, we study firm-bank relationship formation. Combining domestic inter-firm network data from value-added tax declarations and credit registry for Hungary, we estimate the spillover effects in bank choice, identifying from variation on the bank level. Having at least one peer in the network who has an existing loan with a bank increases the probability that the firm will borrow a new loan from the same bank. We provide suggestive evidence that the estimated spillover effect is due to firm-to-firm information transmission about banks. According to our results, firms can learn about banking practices from their peers but they also point to financial stability concerns in the event of shocks to domestic supply chains.
Length: 44 pages
Creation-Date: 2021
File-URL: https://www.mnb.hu/letoltes/mnb-wp-2021-1-final-1.pdf
File-Format: Application/pdf
Number: 2021/1
Classification-JEL: G30, L14, D22.
Keywords: bank choice, firm network, spillover effects.
Handle: RePEc:mnb:wpaper:2021/1