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The effect of market size structure on competition: the case of small business lending Author info | Abstract | Publisher info | Download info | Related research | Statistics Allen N. Berger
Richard J. Rosen
Gregory F. Udell
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Banking industry consolidation has raised concern about the supply of small business credit since large banks generally invest lower proportions of their assets in small business loans. However, we find that the likelihood that a small business borrows from a bank of a given size is roughly proportional to the local market presence of banks of that size, although there are exceptions. Moreover, small business loan interest rates depend more on the size structure of the market than on the size of the bank providing the credit, with markets dominated by large banks generally charging lower prices.
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Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number
2001-63.
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Date of creation: 2001Date of revision:
Handle: RePEc:fip:fedgfe:2001-63Contact details of provider: Postal: 20th Street and Constitution Avenue, NW, Washington, DC 20551 Web page: http://www.federalreserve.gov/ More information through EDIRC
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Keywords: Small business Loans Other versions of this item:
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Hannan, Timothy H., 1991.
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[Downloadable!] (restricted)
Berger, Allen N. & Klapper, Leora F. & Udell, Gregory F., 2001.
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Berger, Allen N. & Klapper, Leora F. & Udell, Gregory F., 2001.
"The ability of banks to lend to informationally opaque small businesses ,"
Policy Research Working Paper Series
2656, The World Bank.
[Downloadable!] Allen N. Berger & Leora F. Klapper & Gregory F. Udell, 2001.
"The ability of banks to lend to informationally opaque small businesses ,"
Finance and Economics Discussion Series
2001-34, Board of Governors of the Federal Reserve System (U.S.).
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"The ability of banks to lend to informationally opaque small businesses ,"
Proceedings ,
Federal Reserve Bank of Chicago, issue May, pages 241-261.
Allen N. Berger & Anthony Saunders & Joseph M. Scalise & Gregory F. Udell, 1998.
"The Effects of Bank Mergers and Acquisitions on Small Business Lending ,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
98-007, New York University, Leonard N. Stern School of Business-.
Other versions:
Allen N. Berger & Anthony Saunders & Joseph M. Scalise & Gregory F. Udell, 1997.
"The Effects of Bank Mergers and Acquisitions on Small Business Lending ,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
97-1, New York University, Leonard N. Stern School of Business-.
Allen N. Berger & Anthony Saunders & Joseph M. Scalise & Gregory F. Udell, 1997.
"The effects of bank mergers and acquisitions on small business lending ,"
Finance and Economics Discussion Series
1997-28, Board of Governors of the Federal Reserve System (U.S.).
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"The effects of bank mergers and acquisitions on small business lending ,"
Proceedings ,
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Journal of Financial Economics ,
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[Downloadable!] (restricted) Jayaratne, Jith & Wolken, John, 1999.
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The Quarterly Journal of Economics ,
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[Downloadable!] (restricted)
Other versions: Berger, Allen N & Hannan, Timothy H, 1989.
"The Price-Concentration Relationship in Banking ,"
The Review of Economics and Statistics ,
MIT Press, vol. 71(2), pages 291-99, May.
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Other versions: Dietmar Harhoff & Timm Körting, 1998.
"Lending Relationships in Germany: Empirical Results from Survey Data ,"
CIG Working Papers
FS IV 98-06, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
[Downloadable!]
Other versions: Jalal D. Akhavein & Allen N. Berger & David B. Humphrey, 1996.
"The Effects of Megamergers on Efficiency and Prices: Evidence from a Bank Profit Function ,"
Center for Financial Institutions Working Papers
96-03, Wharton School Center for Financial Institutions, University of Pennsylvania.
Other versions: Charlotte Ostergaard, 2000.
"External Financing Costs and Banks Loan Supply: Does the Structure of the Bank Sector Matter? ,"
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Ferri, Giovanni & Messori, Marcello, 2000.
"Bank-firm relationships and allocative efficiency in Northeastern and Central Italy and in the South ,"
Journal of Banking & Finance ,
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[Downloadable!] (restricted)
Rebel A. Cole & Lawrence G. Goldberg & Lawrence J. White, 1999.
"Cookie-cutter versus character: the micro structure of small business lending by large and small banks ,"
Proceedings ,
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[Downloadable!]
Other versions: Berger, Allen N & Udell, Gregory F, 1995.
"Relationship Lending and Lines of Credit in Small Firm Finance ,"
Journal of Business ,
University of Chicago Press, vol. 68(3), pages 351-81, July.
[Downloadable!] (restricted)
Katerina Simons & Joanna Stavins, 1998.
"Has antitrust policy in banking become obsolete? ,"
New England Economic Review ,
Federal Reserve Bank of Boston, issue Mar, pages 13-26.
[Downloadable!]
Angelini, P. & Di Salvo, R. & Ferri, G., 1998.
"Availability and cost of credit for small businesses: Customer relationships and credit cooperatives ,"
Journal of Banking & Finance ,
Elsevier, vol. 22(6-8), pages 925-954, August.
[Downloadable!] (restricted)
Berlin, Mitchell & Mester, Loretta J, 1999.
"Deposits and Relationship Lending ,"
Review of Financial Studies ,
Oxford University Press for Society for Financial Studies, vol. 12(3), pages 579-607.
Other versions: Peek, Joe & Rosengren, Eric S., 1998.
"Bank consolidation and small business lending: It's not just bank size that matters ,"
Journal of Banking & Finance ,
Elsevier, vol. 22(6-8), pages 799-819, August.
[Downloadable!] (restricted)
Other versions: Hannan, Timothy H & Berger, Allen N, 1991.
"The Rigidity of Prices: Evidence from the Banking Industry ,"
American Economic Review ,
American Economic Association, vol. 81(4), pages 938-45, September.
[Downloadable!] (restricted)
Allen N.Berger & Lawrence G. Goldberg & Lawrence J. White, 2001.
"The Effects of Dynamic Changes in Bank Competition on the Supply of Small Business Credit ,"
Working Papers
01-07, New York University, Leonard N. Stern School of Business, Department of Economics.
[Downloadable!]
Other versions:
Berger, A.N. & Goldberg, L.G. & White, L.J., 2001.
"The Effects of Dynamic Change in Bank Competition on the Supply of Small Business Credit ,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
01-07, New York University, Leonard N. Stern School of Business-.
Allen N. Berger & Lawrence G. Goldberg & Lawrence J. White, 2001.
"The effects of dynamic changes in bank competition on the supply of small business credit ,"
Finance and Economics Discussion Series
2001-35, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!] Thakor, Anjan V., 2000.
"Relationship Banking ,"
Journal of Financial Intermediation ,
Elsevier, vol. 9(1), pages 3-5, January.
[Downloadable!] (restricted)
George W. Haynes & Charles Ou & Robert Berney, 1999.
"Small business borrowing from large and small banks ,"
Proceedings ,
Federal Reserve Bank of Chicago, issue Mar, pages 287-327.
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Degryse, Hans & Van Cayseele, Patrick, 2000.
"Relationship Lending within a Bank-Based System: Evidence from European Small Business Data ,"
Journal of Financial Intermediation ,
Elsevier, vol. 9(1), pages 90-109, January.
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Other versions: Prager, Robin A & Hannan, Timothy H, 1998.
"Do Substantial Horizontal Mergers Generate Significant Price Effects? Evidence from the Banking Industry ,"
Journal of Industrial Economics ,
Blackwell Publishing, vol. 46(4), pages 433-52, December.
[Downloadable!] (restricted)
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
William Keeton, 2003.
"The role of community banks in the U.S. economy ,"
Economic Review ,
Federal Reserve Bank of Kansas City, issue Q II, pages 15-43.
[Downloadable!]
Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuram G. Rajan & Jeremy C. Stein, 2002.
"Does Function Follow Organizational Form? Evidence From the Lending Practices of Large and Small Banks ,"
NBER Working Papers
8752, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuram G. Rajan & Jeremy C. Stein, 2002.
"Does Function Follow Organzizational Form? Evidence From the Lending Practices of Large and Small Banks ,"
Harvard Institute of Economic Research Working Papers
1976, Harvard - Institute of Economic Research.
[Downloadable!] Allen N. Berger & Nathan H. Miller & Mitchell A. Petersen & Raghuran G. Rajan & Jeremy C. Stein, 2002.
"Does function follow organizational form? evidence from the lending practices of large and small banks ,"
Proceedings ,
Federal Reserve Bank of Chicago, issue May, pages 383-400.
Berger, Allen N. & Miller, Nathan H. & Petersen, Mitchell A. & Rajan, Raghuram G. & Stein, Jeremy C., 2005.
"Does function follow organizational form? Evidence from the lending practices of large and small banks ,"
Journal of Financial Economics ,
Elsevier, vol. 76(2), pages 237-269, May.
[Downloadable!] (restricted) Douglas D. Evanoff & Evren Ors, 2002.
"Local market consolidation and bank productive efficiency ,"
Working Paper Series
WP-02-25, Federal Reserve Bank of Chicago.
[Downloadable!]
Hans Degryse & Steven Ongena, 2002.
"Distance, Lending Relationships, and Competition ,"
CSEF Working Papers
80, Centre for Studies in Economics and Finance (CSEF), University of Salerno, Italy.
[Downloadable!]
Other versions:
Degryse, H. & Ongena, S., 2002.
"Distance, lending relationships, and competition ,"
Discussion Paper
16, Tilburg University, Center for Economic Research.
[Downloadable!] Ongena, S. & Degreyse, H.A., 2003.
"Distance, lending relationships, and competition ,"
Discussion Paper
123, Tilburg University, Center for Economic Research.
[Downloadable!] Hans Degryse & Steven Ongena, 2005.
"Distance, Lending Relationships, and Competition ,"
Journal of Finance ,
American Finance Association, vol. 60(1), pages 231-266, 02.
[Downloadable!] (restricted)
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