Social Connectedness in Bank Lending

• 成果类型: Article
• 署名作者: Rehbein, Oliver; Rother, Simon
• 署名单位: Vienna University of Economics & Business; University of Mannheim
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaf014
• 发表日期: 2025
• 页码: 2759
• 关键词: information acquisition; SMALL WORLD; networks; distance; matter; INVESTMENT; IMPACT; connections; incentives; borrowers

摘要

We present evidence that loan allocations and loan terms are closely linked to the strength of social connections between bank and borrower regions. Lending increases with social connectedness, particularly in the presence of strong screening incentives. If connectedness is high, banks discriminate between borrowers more, the terms of originated loans are more borrower friendly, and loan performance is better. Furthermore, social connectedness is associated with higher bank profitability and with lending-related increases in borrower-region GDP growth and employment. Our results suggest that lending barriers decrease with social connectedness, which helps our understanding of geographic lending patterns and regional economic disparities.