Paper “When Arm’s Length is too Far” accepted for Journal of Financial Economics

My paper “When Arm’s Length is too Far: Relationship Banking over the Credit Cycle” written jointly with Thorsten Beck, Hans Degryse and Ralph de Haas has been accepted for the Journal of Financial Economics. Using data from 21 countries in central and eastern Europe we show that relationship lending alleviates credit constraints during a cyclical downturn but not during a boom period. The positive impact of relationship lending in an economic downturn is strongest for smaller and more opaque firms and in regions where the downturn is more severe.