Banking Relationships, Managerial Ownership and Operational Performance: A Simultaneous Equations Approach in the Context of SMEs

Pinto, António; Augusto, Mário

http://hdl.handle.net/10400.19/2364

Use this identifier to reference this record.

Name:	Description:	Size:	Format:
10 - Pinto (2015) Banking relationship, Managerial Ownership and Operational Performance. A Simultaneous Equation approach in the context of SMEs.pdf		317.6 KB	Adobe PDF	Download

Send Feedback

Authors

Pinto, António

Augusto, Mário

Abstract(s)

This paper provides new evidence for the relationship between the nature of banking relationships, managerial ownership and operational performance in supporting reciprocal effects between these variables in the context of small and medium enterprises (SMEs). A simultaneous equations model was applied to a sample of 4,163 Portuguese SMEs and to cross-section data. Evidence was found that these attributes provide simultaneous relations among themselves. In particular, on the one hand, our results support a negative effect of the number of banks with which the company works and managerial ownership on operational performance. On the other hand, the number of banks with which the company maintains a relationship is positively conditioned by operational performance and negatively by managerial ownership. In turn, managerial ownership is negatively conditioned by operational performance and the nature of the banking relationship.