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Keep walking? Geographical proximity, religion, and relationship banking

Beck, T. ORCID: 0000-0001-8382-2066, Ongena, S. and Şendeniz-Yüncü, İ. (2018). Keep walking? Geographical proximity, religion, and relationship banking. Journal of Corporate Finance, doi: 10.1016/j.jcorpfin.2018.07.005

Abstract

We investigate the geographical proximity of firms to their relationship banks. We find that Islamic banks are more remote to their borrowers. We also find that the probability for a firm to connect to a bank substantially decreases in distance, but that the choice along bank characteristics determines how potent distance is in its impact. If the bank in the vicinity is an Islamic bank, distance plays a more muted role, especially in cities with a high conservative party vote and higher trust in religious institutions. Overall, these findings suggest that the presence of banks with certain characteristics in the vicinity may determine the within-firm and across-firm configurations of observable firm-bank connections. (112 words).

Publication Type: Article
Additional Information: © 2018. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords: Geography of banking, Islamic banking
Subjects: H Social Sciences > HG Finance
Departments: Cass Business School > Finance
URI: http://openaccess.city.ac.uk/id/eprint/20788
[img] Text - Accepted Version
This document is not freely accessible until 23 February 2020 due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

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