Bank Competition, Financing Obstacles, and Access to Credit
Theory makes ambiguous predictions about the effects of bank concentration on access to external finance. Using a unique data base for 74 countries of financing obstacles and financing patterns for firms of small, medium, and large size, Beck, Demirguc-Kunt, and Maksimovic assess the effects of banking market structure on financing obstacles and the access of firms to bank finance. The authors find that bank concentration increases financing obstacles and decreases the likelihood of receiving bank finance, with the impact decreasing in size. The relation of bank concentration and financing obstacles is dampened in countries with well developed institutions, higher levels of economic and financial development, and a larger share of foreign-owned banks. The effect is exacerbated by more restrictions on banks' activities, more government interference in the banking sector, and a larger share of government-owned banks. Finally, it is possible to alleviate the negative impact of bank concentration on access to finance by reducing activity restrictions.This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to understand the effects of bank competition
Year of publication: |
[2016]
|
---|---|
Authors: | Beck, Thorsten |
Other Persons: | Maksimovic, Vojislav (contributor) ; Demirgüç-Kunt, Asli (contributor) |
Publisher: |
[2016]: [S.l.] : SSRN |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Bank competition and access to finance: international evidence
Beck, Thorsten, (2004)
-
Financial and Legal Constraints to Growth: Does Firm Size Matter?
BECK, THORSTEN, (2005)
-
Financing patterns around the world: Are small firms different?
Beck, Thorsten, (2008)
- More ...