Supply Chain Characteristics and Bank Lending Decisions

This paper examines the impact of banks’ lending incentives on asset prices and bank cash holdings under liquidity risk. Banks make lending decisions based on the tradeoff between costs (fire sales of illiquid assets) and benefits (high returns from bank loans). This paper shows fire sales of assets can be an endogenous outcome, even if banks are endowed with enough cash to meet liquidity shocks. This paper also helps explain why banks have kept a large amount of cash without lending after government capital injections in the 2008 financial crisis. The model further provides policy implications for government intervention.

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Biases and debiasing in bank lending decisions to nascent entrepreneurs - an experimental study

International Journal of Entrepreneurship and Small Business ◽

10.1504/ijesb.2013.057202 ◽

2013 ◽

Vol 20 (4) ◽

pp. 462

Author(s):

Jutta Wollersheim ◽

Christoph Döbrich ◽

Matthias Spörrle ◽

Isabell M. Welpe

Keyword(s):

Experimental Study ◽

Bank Lending ◽

Nascent Entrepreneurs ◽

Lending Decisions

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Bank lending decisions and small firms: does size matter?

International Journal of Entrepreneurial Behaviour & Research ◽

10.1108/13552559610119331 ◽

1996 ◽

Vol 2 (2) ◽

pp. 52-68 ◽

Cited By ~ 18

Author(s):

Marc Cowling ◽

Paul Westhead

Keyword(s):

Small Firms ◽

Bank Lending ◽

Lending Decisions ◽

Size Matter

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An Empirical Analysis Of Lending Decisions And Report Purchases Of Privately Held Middle Market Companies

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v3i2.6531 ◽

2011 ◽

Vol 3 (2) ◽

pp. 47

Author(s):

Ceil Moran Pillsbury

Keyword(s):

Empirical Analysis ◽

Experimental Studies ◽

Bank Lending ◽

Critical Aspect ◽

Accounting Firms ◽

Reporting Service ◽

Lending Decisions ◽

Lending Decision ◽

Middle Market ◽

Privately Held

Several experimental studies have found that the auditors report did not significantly influence bank lending decisions. This study employs actual data to test whether the level of reporting service influences lending decisions of Privately Held Middle Market (PHMM) companies. The results indicate that the report type significantly influences at least one critical aspect of the lending decision the amount lent. Further, the report type was found to be strongly related to the amount of collateral and the size of the company. In addition, descriptive evidence is provided on what type of reporting services are purchased by PHMM companies and what type of accounting firms are providing those services.

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Economic policy uncertainty effect on credit risk, lending decisions and banking performance: evidence from Tunisian listed banks

Journal of Economic and Administrative Sciences ◽

10.1108/jeas-09-2020-0159 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Khalfaoui Hamdi ◽

Guenichi Hassen

Keyword(s):

Economic Policy ◽

Credit Risk ◽

Bank Lending ◽

Policy Uncertainty ◽

Content Type ◽

Economic Policy Uncertainty ◽

Empirical Level ◽

Private Banks ◽

Lending Decisions ◽

And Performance

PurposeThis paper examines the effect of economic policy uncertainty (EPU) on credit risk, lending decisions and banking performance of Tunisian listed banks over the period 1999–2019.Design/methodology/approachTo identify the relationship between EPU, credit risk, lending decisions and banking performance, we have proceeded with a fixed effects panel regression model over the period 1999–2019.FindingsOur empirical analysis showed a significant positive effect of EPU on credit risk and a significant negative effect on loan size and performance. We have also found that state-owned banks were the most affected by increasing EPU. Their credit risk has increased and their returns have decreased. While highly leveraged private banks have recorded a sharp decline in their results.Research limitations/implicationsFacing increasing credit risks, generated by EPU, Tunisian banks are allowed to revise their lending decisions to ensure consequently their sustainability and performance.Practical implicationsTunisian resident banks should set up a monitoring system and an early-warning system of credit risk in order to guarantee both, their performance and the sustainability of the economy's financing.Social implicationsA good banking governance and a stable economic and political environment are the key factors that improve the allocation of credit, credit risk diversification and the creation of added value for the different activity sectors.Originality/valueOn the theoretical as well as on the empirical level, the analysis of the Tunisia EPU on credit risk, bank lending strategy and banking performance was not handled previously in the literature. It was noted that state banks are more influenced by the increase of EPU. Their credit risk has increased and their returns have declined. However, private banks with a high leverage effect have recorded a net decrease in their results. Since the 2011 revolution, invisibility and EPU have largely influenced the bank lending decisions and subsequently banking performance.

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