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The e§ect of Bank Concentration on Entrepreneurship in Central and Eastern European Transition Countries

Author

Listed:
  • Angela S. Bergantino

    () (University of Bari "Aldo Moro")

  • Claudia Capozza

    () (University of Bari "Aldo Moro")

Abstract

Using data from 2000 to 2007, we investigate the e§ect of bank concentration on the entrepreneurial initiative in the Central and Eastern European transition countries for eight industrial sectors. We set up a simple structural model by which we test the relationship between banking market structure and Örm cre- ation. First, we estimate the model on the whole sample, to test the general e§ect; then, we restrict the analysis to the high-technology-intensive sectors to verify the speciÖc impact of banking market structure on industries which are, usually, more in need of external Önance. Our results provide evidence of a non monotonic relationship: bank concentration promotes entrepreneurship; however, an excessive level of concentration becomes harmful. Moreover, the positive effect of concentration decreases for high-technology-intensive sectors. Entrepreneur- ship is also favoured by well-developed Önancial markets, perceived quality of the institutional environment, policies to prevent corruption and e§ective property rights protection.

Suggested Citation

  • Angela S. Bergantino & Claudia Capozza, 2012. "The e§ect of Bank Concentration on Entrepreneurship in Central and Eastern European Transition Countries," SERIES 0043, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Nov 2012.
  • Handle: RePEc:bai:series:economia-series43
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    bank concentration; transition economies; firm creation;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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