bank relationship with a specific bank, ceteris paribus, the less likely the company is to break that relationship off; this proposition concerning the changeableness of the main bank relationship is also a testable one; (c) the growth of the borrowing companies, it can be regarded as related to main bank changes in 2 ways: first, the growth of a company raise its reputation and credibility in financial market so that the lenders dont need to spend much information cost to confirm its credit, if the main bank relationship means economizing on information costs, we can expect those companies have achieved relatively rapid growth to show more tendencies to leave main bank relationships that those that have been stagnant; second, rapidly growing companies will tend to switch their main bank relationships to large banks as its easy to accommodate their customers expanding demands for diversified financial services.and (d) the leading bank factor, since the leading banks have capability of supplying a larger variety of services, including financial services overseas, they tend to increase their shares in main bank relationships.There is a type of contingency claim between banks and the borrowing companies which are in their financial groups. Namely, the lending rate remains relatively low when the market rate rises, and the rate stays relatively high when the market rate fails. Through this sort of contract, the borrowers are able to some extent to avoid the risk of movements in the market interest rate. There is another study supports the hypothesis that in the Japanese bank loan market, banks and firms share risks through loan contract arrangement. They even say that some part of the loan interest rate rigidity in Japan can be explained by the implicit contracts between banks and borrowing companies.However, the stabilization of interest expenses does not necessarily imply the stabilization of the borrowing companies operating performance...
