Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7356039 | Journal of Accounting and Economics | 2017 | 68 Pages |
Abstract
Lending concentration features prominently in models of information acquisition by banks, but empirical evidence on its role is limited. Using bank-level loan exposures, we find banks are less likely to collect audited financial statements from firms in industries and regions in which they have more exposure. These findings are stronger in settings in which adverse selection is acute and muted when the bank lacks experience with an exposure. Our results offer novel evidence on how bank characteristics are related to the type of financial information they use and support theoretical predictions suggesting portfolio concentration reveals a bank's relative expertise.
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Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Philip G. Berger, Michael Minnis, Andrew Sutherland,