Relationship Lending and Corporate Investment Decisions

Over the past decades, the role of banks in shaping corporate financial and real decisions has received increasing attention. Among the various lending models, relationship lending—defined as the provision of credit based on the accumulation of soft, non-verifiable information through repeated interactions between the bank and the borrower—has emerged as a key mechanism to mitigate informational frictions, particularly for small, opaque, and financially constrained firms.