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Do firm–bank relationships affect firms’ internationalization?

Author

Listed:
  • Riccardo De Bonis
  • Giovanni Ferri
  • Zeno Rotondi
Abstract
We test whether the length of a firm–bank relationship affects firms’ foreign direct investment (FDI) and/or exports and if this nexus depends on the main bank itself being internationalized. The analysis is carried out on matched micro-data from a large survey of Italian manufacturing enterprises from 1998 to 2003. Our main result is that a longer relationship with the main bank fosters firms’ FDI but does not affect exports. Moreover, when the main bank has subsidiaries abroad this result is strengthened for FDI and there is even a weak positive effect of the duration of the firm–bank relationship on exports.

Suggested Citation

  • Riccardo De Bonis & Giovanni Ferri & Zeno Rotondi, 2015. "Do firm–bank relationships affect firms’ internationalization?," International Economics, CEPII research center, issue 142, pages 60-80.
    • Handle: RePEc:cii:cepiie:2015-q2-142-5
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    Cited by:

    1. Minetti, Raoul & Zhu, Susan, 2018. "Are Banks Engines of Export? Financial Structures and Export Dynamics," Working Papers 2018-5, Michigan State University, Department of Economics.
    2. Giovanni Ferri & Pierluigi Murro, 2016. "A Credit Crunch Behind the Great Trade Collapse? Micro Evidence From Europe," CERBE Working Papers wpC10, CERBE Center for Relationship Banking and Economics.
    3. Steven Poelhekke, 2016. "Financial Globalization and Foreign Direct Investment," Tinbergen Institute Discussion Papers 16-098/VIII, Tinbergen Institute.
    4. Ferri, Giovanni & Minetti, Raoul & Murro, Pierluigi, 2019. "Credit Relationships in the great trade collapse. Micro evidence from Europe," Journal of Financial Intermediation, Elsevier, vol. 40(C).
    5. Matteo Bugamelli & Silvia Fabiani & Stefano Federico & Alberto Felettigh & Claire Giordano & Andrea Linarello, 2018. "Back on Track? A Macro–Micro Narrative of Italian Exports," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 1-31, March.
    6. Bernardina Algieri & Antonio Aquino & Lidia Mannarino, 2018. "Non-Price Competitiveness and Financial Drivers of Exports: Evidences from Italian Regions," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 107-133, March.
    7. Steven Poelhekke, 2016. "Financial Globalization and Foreign Direct Investment," Tinbergen Institute Discussion Papers 16-098/VIII, Tinbergen Institute.
    8. Hsiang-Hsi Liu & Wang Chiang Ko, 2017. "Measuring the Degree of Internationalization for Taiwanese Banking Industry: Scoring Measurement by Principal Component Analysis," International Business Research, Canadian Center of Science and Education, vol. 10(6), pages 212-226, June.
    9. Pasquale Marcello Falcone, 2018. "Green investment strategies and bank-firm relationship: a firm-level analysis," Economics Bulletin, AccessEcon, vol. 38(4), pages 2225-2239.

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    More about this item

    Keywords

    Internationalization; Foreign direct investment; Exports; External finance; Firm–bank relationships; Bank internationalization mode;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F10 - International Economics - - Trade - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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