This paper studies the effect of audit market competition on the clients' cost of bank loans. Exploiting the demise of … Arthur Andersen, which differently reduced the local audit market competition of metropolitan statistical areas (MSAs), we … find that auditor competition increases the cost of bank loans of auditors' client firms. Further analysis indicates that …

This paper is the first that applies a new measure of competition, the Boone indicator, to the banking industry. This … approach is able to measure competition of bank market segments, such as the loan market, whereas many well-known measures of … competition can consider the entire banking market only. A caveat of the Boone-indicator may be that it assumes that banks …