Firm Failure and Relationship Lending: New Evidence from Small Businesses

Borradores de Economia
Number: 
638
Published: 
Classification JEL: 
G20, G21, C40
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy
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We study the effect of relationship lending on small firms' failure probability using a uniquely rich data set comprised of information on individual loans of a large number of small firms in Colombia. We control for firm-specific variables and find that