Recent studies have presented evidence of scale economies for large banks, providing a rationale for some very large banks seen worldwide. In this study, we focus on the negative side of bank size which relates to monitoring costs. In particular, we show that the relationship between size and...

Do policies that promote credit access have an impact on targeted borrowers? To address this question, we develop a theoretical model of information production, regulation and bank competition and test its predictions using the Community Reinvestment Act's small businesses lending program. The...

Customer data offers monetization opportunities but also entails potential risks for many businesses because of customer privacy concerns. Despite the increasing importance of these trade offs, there is limited research of their impact on businesses. To address this gap, we develop a theoretical...

This paper analyzes how bank regulation that promotes greater access to credit impacts the financing of targeted small firms. It develops a model where banks compete with trade creditors to fund small firms and applies it to study the effects of the Community Reinvestment Act (CRA). The...

Does the recent proliferation of technology in lending process have an impact on business loan market competition? Using a theoretical model that assumes heterogeneity in lenders’ screening ability and borrowers’ investment horizon, we show that FinTech (Traditional) lenders primarily supply...