How Bank Competition Affects Firms' Access to Finance
Combining multi-year, firm-level surveys with country-level panel data for 53 countries, the authors explore the impact of bank competition on firms' access to finance. They find that low competition, as measured by high values of the Lerner i...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/08/16592677/bank-competition-affects-firms-access-finance http://hdl.handle.net/10986/12010 |
| Summary: | Combining multi-year, firm-level surveys
with country-level panel data for 53 countries, the authors
explore the impact of bank competition on firms' access
to finance. They find that low competition, as measured by
high values of the Lerner index, diminishes firms'
access to finance, while commonly-used bank concentration
measures are not robust predictors of firms' access to
finance. In addition, they find that the impact of
competition on access to finance depends on the environment
that banks operate in. Some features of the environment,
such as greater financial development and better credit
information, can mitigate the damaging impact of low
competition. But other characteristics, such as high
government bank ownership, can exacerbate the negative effect. |
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