The time has come for banks to say goodbye: New evidence on bank roles and duration effects in relationship terminations

摘要

Examining a loan-level matched sample of Japanese banks and firms, we study the factors determining the termination of bank-firm relationships. We find that such terminations are mainly driven by bank-side factors and that these bank-driven terminations increase when banks' capital conditions worsen. Furthermore, a longer relationship duration decreased the probability of termination substantially when the Japanese banking system was stable, whereas the duration effects weakened when the system became fragile. (C) 2020 Elsevier B.V. All rights reserved.