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...

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Main Authors: Love, Inessa, Martínez Peria, María Soledad
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2012
Subjects:
GDP
Online Access:http://documents.worldbank.org/curated/en/2012/08/16592677/bank-competition-affects-firms-access-finance
http://hdl.handle.net/10986/12010
id okr-10986-12010
recordtype oai_dc
spelling okr-10986-120102021-04-23T14:02:58Z How Bank Competition Affects Firms' Access to Finance Love, Inessa Martínez Peria, María Soledad ACCESS TO BANK ACCESS TO CREDIT ACCESS TO FINANCE ACCESSIBILITY ACCOUNTS RECEIVABLE ADVERSE SELECTION AVAILABILITY OF CREDIT AVAILABILITY OF FINANCE BAILOUTS BALANCE SHEET BANK ASSETS BANK BRANCH BANK COMPETITION BANK ENTRY BANK HOLDING BANK HOLDING COMPANIES BANK LOAN BANK MARKET BANK MERGERS BANK POLICY BANK REGULATION BANKING INDUSTRY BANKING MARKET BANKING MARKETS BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BANKS BORROWING CENTRAL BANKS CHECKS COLLATERAL COMPETITIVENESS CONSOLIDATION CONSUMER PROTECTION CONTRACT ENFORCEMENT COUNTRY COMPARISONS CREDIT BUREAU CREDIT CONSTRAINTS CREDIT FACILITIES CREDIT INFORMATION CREDIT MARKET CREDIT MARKETS CREDIT PRODUCTS CREDIT REGISTRIES CREDIT REGISTRY CULTURAL BIASES DEBT DENIAL RATES DEPOSIT DEPOSITS DEREGULATION DERIVATIVE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOMESTIC CREDIT DUMMY VARIABLE DUMMY VARIABLES ECONOMIC GROWTH ELASTICITY EMERGING MARKETS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENVIRONMENTS EXPORTER EXPORTERS EXTERNAL DEBT FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ACCESS FINANCIAL COSTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTION FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL PRODUCT FINANCIAL REFORM FINANCIAL SERVICES FINANCIAL STUDIES FINANCIAL SYSTEM FINANCING OBSTACLES FOREIGN FIRMS FUTURE RESEARCH GDP GDP DEFLATOR GOVERNMENT BANK GOVERNMENT BANKS GOVERNMENT OWNERSHIP GREATER CREDIT AVAILABILITY GROSS REVENUE GROWTH RATE INDUSTRIAL ECONOMICS INFLATION INFLATION RATE INFORMATION ASYMMETRIES INPUT PRICES INTANGIBLE INTANGIBLE ASSETS INTEREST RATES INTERNATIONAL BANK INVENTORY INVESTING INVESTMENT BANKS LACK OF COMPETITION LENDER LENDING INSTITUTIONS LINE OF CREDIT LINES OF CREDIT LOAN LOAN APPLICATION LOAN CONTRACTS LOAN MARKETS LOAN PRICES LOCAL BANKS MARGINAL COST MARGINAL COSTS MARKET COMPETITION MARKET MECHANISMS MARKET POWER MARKET SHARE MARKET STRUCTURE MONOPOLY MORTGAGE MORTGAGE MARKET MORTGAGE MARKETS OVERDRAFT OVERDRAFT FACILITY OVERDRAFTS OWNERSHIP STRUCTURE PERSONAL ASSETS PERSONNEL EXPENSES PRIVATE CREDIT PRIVATE CREDIT BUREAU PROPERTY RIGHTS PROPERTY RIGHTS PROTECTION PUBLIC CREDIT RETAIL ENTERPRISES SAVINGS SHARE OF ASSETS SMALL BUSINESS SMALL BUSINESS CREDIT SMALL BUSINESS LENDING TOTAL OUTPUT UNIVERSAL BANKING VALUE OF COLLATERAL 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. 2012-12-21T20:15:20Z 2012-12-21T20:15:20Z 2012-08 http://documents.worldbank.org/curated/en/2012/08/16592677/bank-competition-affects-firms-access-finance http://hdl.handle.net/10986/12010 English en_US Policy Research Working Paper;6163 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ACCESS TO BANK
ACCESS TO CREDIT
ACCESS TO FINANCE
ACCESSIBILITY
ACCOUNTS RECEIVABLE
ADVERSE SELECTION
AVAILABILITY OF CREDIT
AVAILABILITY OF FINANCE
BAILOUTS
BALANCE SHEET
BANK ASSETS
BANK BRANCH
BANK COMPETITION
BANK ENTRY
BANK HOLDING
BANK HOLDING COMPANIES
BANK LOAN
BANK MARKET
BANK MERGERS
BANK POLICY
BANK REGULATION
BANKING INDUSTRY
BANKING MARKET
BANKING MARKETS
BANKING SECTOR
BANKING SECTORS
BANKING SYSTEM
BANKING SYSTEMS
BANKS
BORROWING
CENTRAL BANKS
CHECKS
COLLATERAL
COMPETITIVENESS
CONSOLIDATION
CONSUMER PROTECTION
CONTRACT ENFORCEMENT
COUNTRY COMPARISONS
CREDIT BUREAU
CREDIT CONSTRAINTS
CREDIT FACILITIES
CREDIT INFORMATION
CREDIT MARKET
CREDIT MARKETS
CREDIT PRODUCTS
CREDIT REGISTRIES
CREDIT REGISTRY
CULTURAL BIASES
DEBT
DENIAL RATES
DEPOSIT
DEPOSITS
DEREGULATION
DERIVATIVE
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DOMESTIC CREDIT
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMIC GROWTH
ELASTICITY
EMERGING MARKETS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
ENVIRONMENTS
EXPORTER
EXPORTERS
EXTERNAL DEBT
FEDERAL RESERVE
FEDERAL RESERVE BANK
FINANCIAL ACCESS
FINANCIAL COSTS
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL INSTITUTION
FINANCIAL INTERMEDIATION
FINANCIAL MARKETS
FINANCIAL PRODUCT
FINANCIAL REFORM
FINANCIAL SERVICES
FINANCIAL STUDIES
FINANCIAL SYSTEM
FINANCING OBSTACLES
FOREIGN FIRMS
FUTURE RESEARCH
GDP
GDP DEFLATOR
GOVERNMENT BANK
GOVERNMENT BANKS
GOVERNMENT OWNERSHIP
GREATER CREDIT AVAILABILITY
GROSS REVENUE
GROWTH RATE
INDUSTRIAL ECONOMICS
INFLATION
INFLATION RATE
INFORMATION ASYMMETRIES
INPUT PRICES
INTANGIBLE
INTANGIBLE ASSETS
INTEREST RATES
INTERNATIONAL BANK
INVENTORY
INVESTING
INVESTMENT BANKS
LACK OF COMPETITION
LENDER
LENDING INSTITUTIONS
LINE OF CREDIT
LINES OF CREDIT
LOAN
LOAN APPLICATION
LOAN CONTRACTS
LOAN MARKETS
LOAN PRICES
LOCAL BANKS
MARGINAL COST
MARGINAL COSTS
MARKET COMPETITION
MARKET MECHANISMS
MARKET POWER
MARKET SHARE
MARKET STRUCTURE
MONOPOLY
MORTGAGE
MORTGAGE MARKET
MORTGAGE MARKETS
OVERDRAFT
OVERDRAFT FACILITY
OVERDRAFTS
OWNERSHIP STRUCTURE
PERSONAL ASSETS
PERSONNEL EXPENSES
PRIVATE CREDIT
PRIVATE CREDIT BUREAU
PROPERTY RIGHTS
PROPERTY RIGHTS PROTECTION
PUBLIC CREDIT
RETAIL ENTERPRISES
SAVINGS
SHARE OF ASSETS
SMALL BUSINESS
SMALL BUSINESS CREDIT
SMALL BUSINESS LENDING
TOTAL OUTPUT
UNIVERSAL BANKING
VALUE OF COLLATERAL
spellingShingle ACCESS TO BANK
ACCESS TO CREDIT
ACCESS TO FINANCE
ACCESSIBILITY
ACCOUNTS RECEIVABLE
ADVERSE SELECTION
AVAILABILITY OF CREDIT
AVAILABILITY OF FINANCE
BAILOUTS
BALANCE SHEET
BANK ASSETS
BANK BRANCH
BANK COMPETITION
BANK ENTRY
BANK HOLDING
BANK HOLDING COMPANIES
BANK LOAN
BANK MARKET
BANK MERGERS
BANK POLICY
BANK REGULATION
BANKING INDUSTRY
BANKING MARKET
BANKING MARKETS
BANKING SECTOR
BANKING SECTORS
BANKING SYSTEM
BANKING SYSTEMS
BANKS
BORROWING
CENTRAL BANKS
CHECKS
COLLATERAL
COMPETITIVENESS
CONSOLIDATION
CONSUMER PROTECTION
CONTRACT ENFORCEMENT
COUNTRY COMPARISONS
CREDIT BUREAU
CREDIT CONSTRAINTS
CREDIT FACILITIES
CREDIT INFORMATION
CREDIT MARKET
CREDIT MARKETS
CREDIT PRODUCTS
CREDIT REGISTRIES
CREDIT REGISTRY
CULTURAL BIASES
DEBT
DENIAL RATES
DEPOSIT
DEPOSITS
DEREGULATION
DERIVATIVE
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DOMESTIC CREDIT
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMIC GROWTH
ELASTICITY
EMERGING MARKETS
EMPIRICAL EVIDENCE
EMPIRICAL STUDIES
ENVIRONMENTS
EXPORTER
EXPORTERS
EXTERNAL DEBT
FEDERAL RESERVE
FEDERAL RESERVE BANK
FINANCIAL ACCESS
FINANCIAL COSTS
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL INSTITUTION
FINANCIAL INTERMEDIATION
FINANCIAL MARKETS
FINANCIAL PRODUCT
FINANCIAL REFORM
FINANCIAL SERVICES
FINANCIAL STUDIES
FINANCIAL SYSTEM
FINANCING OBSTACLES
FOREIGN FIRMS
FUTURE RESEARCH
GDP
GDP DEFLATOR
GOVERNMENT BANK
GOVERNMENT BANKS
GOVERNMENT OWNERSHIP
GREATER CREDIT AVAILABILITY
GROSS REVENUE
GROWTH RATE
INDUSTRIAL ECONOMICS
INFLATION
INFLATION RATE
INFORMATION ASYMMETRIES
INPUT PRICES
INTANGIBLE
INTANGIBLE ASSETS
INTEREST RATES
INTERNATIONAL BANK
INVENTORY
INVESTING
INVESTMENT BANKS
LACK OF COMPETITION
LENDER
LENDING INSTITUTIONS
LINE OF CREDIT
LINES OF CREDIT
LOAN
LOAN APPLICATION
LOAN CONTRACTS
LOAN MARKETS
LOAN PRICES
LOCAL BANKS
MARGINAL COST
MARGINAL COSTS
MARKET COMPETITION
MARKET MECHANISMS
MARKET POWER
MARKET SHARE
MARKET STRUCTURE
MONOPOLY
MORTGAGE
MORTGAGE MARKET
MORTGAGE MARKETS
OVERDRAFT
OVERDRAFT FACILITY
OVERDRAFTS
OWNERSHIP STRUCTURE
PERSONAL ASSETS
PERSONNEL EXPENSES
PRIVATE CREDIT
PRIVATE CREDIT BUREAU
PROPERTY RIGHTS
PROPERTY RIGHTS PROTECTION
PUBLIC CREDIT
RETAIL ENTERPRISES
SAVINGS
SHARE OF ASSETS
SMALL BUSINESS
SMALL BUSINESS CREDIT
SMALL BUSINESS LENDING
TOTAL OUTPUT
UNIVERSAL BANKING
VALUE OF COLLATERAL
Love, Inessa
Martínez Peria, María Soledad
How Bank Competition Affects Firms' Access to Finance
relation Policy Research Working Paper;6163
description 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.
format Publications & Research :: Policy Research Working Paper
author Love, Inessa
Martínez Peria, María Soledad
author_facet Love, Inessa
Martínez Peria, María Soledad
author_sort Love, Inessa
title How Bank Competition Affects Firms' Access to Finance
title_short How Bank Competition Affects Firms' Access to Finance
title_full How Bank Competition Affects Firms' Access to Finance
title_fullStr How Bank Competition Affects Firms' Access to Finance
title_full_unstemmed How Bank Competition Affects Firms' Access to Finance
title_sort how bank competition affects firms' access to finance
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2012/08/16592677/bank-competition-affects-firms-access-finance
http://hdl.handle.net/10986/12010
_version_ 1764418685825449984