Does banking relationship configuration affect the risk-taking behavior of French SMEs?


  • Ludovic Vigneron Valenciennes University, France
  • Ramzi Benkraiem Audencia Nantes School of Management, France



Using a new and unique dataset dealing with French small and medium-sized enterprise (SME) financing that provides detailed information about 1 116 firm-bank relationships, we test how the number of banks with which a firm works and the organizational structure of its main bank influence its risk-taking behavior. We find evidence that SMEs engaged with a decentralized main bank (a local or mutual one) invest in less risky projects, especially when they work with fewer than three banks (one or two). We also find evidence that single-bank SMEs engaged with a centralized bank (a large or foreign one) take significantly more risks than the others.

Author Biography

Ramzi Benkraiem, Audencia Nantes School of Management, France

Dr Ramzi Benkraiem is an Associate Professor of Financial Accounting & Finance at Audencia School of Management in France. He Holds a PhD from Toulouse Graduate School of Management and an HDR (State Habilitation for supervising Doctoral Research) from Western Brittany University. His research interests lie mainly within the Economics, Accounting and Finance areas. He published several papers in both French and international peer-reviewed journals.


Acharya, V., Amihud, Y., Litov, L., 2011 “Creditor rights and corporate risk-taking” Journal of Financial Economics 102, 150-166.

Adams, R. B., Almeida, H., and Ferriera, D., 2005 “Powerfull CEOs and their impact on corporate performance” The Review of Financial Studies 18, 1403-1432.

Benkraiem, R., 2014 “Small business investment sensitivity of debt before and during the global crisis” Economics Bulletin 34 (2), 1185-1196.

Bennardo, A., Pagano, M., Piccolo, S., 2014 “Multiple bank lending, creditor rights and information sharing” The Review of Finance, Forthcoming.

Boot, A., 2000 “Relationship banking: What do we know?” Journal of Financial Intermediation, 9, 7-25.

Boubaker, S., Nguyen, P., Rouati, W., 2012 “Large shareholders and firm risk-taking behavior” Financial Markets and Corporate Governance Conference.

Bris, A., Welsh, I., 2005 “The optimal concentration of creditors” Journal of Finance 60, 2193-2212.

Carletti, E., 2004 “The structure of relationship lending, endogenous monitoring and loan rates” Journal of Financial Intermediation 13, 58-86.

Cheng, S., 2008 “Board size and variability of corporate performance” Journal of Financial Economics, 87, 157-176.

Fluet, C., Garellea, P., 2014 “Debt rescheduling with multiple lenders: Relying on the information of others” Economica, 81, 698-720.

Glejser, H., 1969 “A New Test for heteroskedasticity” Journal of American Statistical Association 64, 316-323.

Himmelberg, C., Hubbard, G., Palia, D., 1999 “Understanding the determinants of managerial ownership and the link between ownership and performance” Journal of Financial Economics 53, 353-384.

Morck, R., Shleifer, A., and Vishny, R., 1988 “Management ownership and market valuation: An empirical analysis” Journal of Financial Economics 20, 293-315.

Yermarck, D., 1996 “Higher market valuation of companies with a small board of directors” Journal of Financial Economics 40, 185-211.




How to Cite

Vigneron, L., & Benkraiem, R. (2015). Does banking relationship configuration affect the risk-taking behavior of French SMEs?. Economics and Business Letters, 4(4), 166–174.