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The structure of the banking sector, credit screening and firm risk


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  • Tröge, Michael
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    With an auction model of bank competition, the relationship between the number of banks in a market, the quality of the firms and the banks’ effort to carry out creditworthiness tests is analyzed. It is shown that, if the cost of information acquisition is taken into account, welfare and the firm’s profit may decrease with a higher number of banks. In general a high number of banks produces more welfare with a bad sample of firms, whereas a low number of banks is preferable for a sample with a lot of good firms. -- Der Aufsatz untersucht mit einem Auktionsmodell des Bankenwettbewerbs den Zusammenhang zwischen der Anzahl der im Wettbewerb stehenden Banken, der Qualität der zu finanzierenden Firmen und den Anreizen der Banken, Kreditwürdigkeitsprüfungen durchzuführen. Es wird gezeigt, daß, wenn man die Kosten des Informationserwerbs mit in Betracht zieht, die Wohlfahrt mit der Anzahl der Wettbewerber sinken kann. Im Allgemeinen erzeugt eine höhere Anzahl von Banken mehr Wohlfahrtsgewinn mit Firmen von schlechter Qualität, wohingegen ein engeres Bankenoligopol bessere Ergebnisse mit sehr guten Firmen erzielt.

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    Bibliographic Info

    Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Dynamics with number FS IV 99-23.

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    Date of creation: 1999
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    Handle: RePEc:zbw:wzbmdy:fsiv9923

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