Do firm–bank relationships affect firms’ internationalization?

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.