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The role of credit market competition on lending strategies and on capital accumulation Author info | Abstract | Publisher info | Download info | Related research | Statistics Nicola Cetorelli
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This paper examines the role of credit market competition in the dynamic of capital accumulation. It is shown that the lending relationship problem which seems to characterize competitive credit markets can have negative repercussions for capital accumulation. In contrast, monopoly power in banking can be beneficial for growth. A monopolist bank may lower the equilibrium quantity of credit, but it allows a better allocation of credit supply. This result reconciles with the available empirical evidence and suggests a positive role for monopoly power in banking, especially for developing countries.
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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series, Issues in Financial Regulation with number
WP-97-14.
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Date of creation: 1997Date of revision:
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Keywords: Credit Capital 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.:
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Other versions:
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[Downloadable!] King, Robert G. & Levine, Ross, 1993.
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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.)
Nicola Cetorelli & Pietro F. Peretto, 2000.
"Oligopoly banking and capital accumulation ,"
Working Paper Series
WP-00-12, Federal Reserve Bank of Chicago.
[Downloadable!]
Other versions: Bossone, Biagio, 1999.
"Financial development and industrial capital accumulation ,"
Policy Research Working Paper Series
2201, The World Bank.
[Downloadable!]
Pere Gomis-Porqueras & Benoit Julien, 2007.
"Market Structure and the Banking Sector ,"
Economics Bulletin ,
Economics Bulletin, vol. 4(24), pages 1-9.
[Downloadable!]
Mark G. Guzman, 1999.
"Bank structure, capital accumulation and growth: a simple macroeconomic model ,"
Working Papers
99-07, Federal Reserve Bank of Dallas.
[Downloadable!]
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