This paper empirically investigates the effect of interbank competition and misallocation of credit on the creation and destruction of establishments. Using industry and prefecture level establishment data from Japan, we find that concentration in the banking sector negatively affects start-up...

The contribution of the present paper is twofold. First, it introduces a practical estimation of banking entrepreneurial reward (remuneration) and uses it as a variable in order to estimate its effect on bank profitability (in the capitalistic countries as well as in the post communist ones)....