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Information Sharing and Credit: Firm-Level Evidence from Transition Countries

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  • Martin Brown
  • Tullio Jappelli
  • Marco Pagano

Abstract

We investigate whether information sharing among banks has affected credit market performance in the transition countries of Eastern Europe and the former Soviet Union, using a large sample of firm-level data. Our estimates show that information sharing is associated with improved availability and lower cost of credit to firms. This correlation is stronger for opaque firms than transparent ones and stronger in countries with weak legal environments than in those with strong legal environments. In cross-sectional estimates, we control for variation in country-level aggregate variables that may affect credit, by examining the differential impact of information sharing across firm types. In panel estimates, we also control for the presence of unobserved heterogeneity at the firm level, as well as for changes in macroeconomic variables and the legal environment.

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Bibliographic Info

Paper provided by D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy in its series Discussion Papers with number 3_2008.

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Date of creation: 07 Apr 2008
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Handle: RePEc:prt:dpaper:3_2008

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Keywords: information sharing; credit access; transition countries;

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