IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Do your Rivals Enhance your Access to Credit? Theory and Evidence

Listed author(s):
  • Vittoria Cerasi

    ()

    (University of Milano-Bicocca, Department of Economics, Management and Statistics)

  • Alessandro Fedele

    ()

    (Free University of Bolzano‐Bozen, Faculty of Economics and Management)

  • Raffaele Miniaci

    ()

    (University of Brescia, Department of Economics and Management)

In this paper, we unveil a disregarded benefit of product market competition for small and medium enterprises (SMEs). In a model where firms are financed through collateralized bank loans and compete à la Cournot, we introduce a probability of bankruptcy. We investigate how the number of rivals and the existence of outsiders willing to acquire productive assets of distressed incumbents affect the equilibrium share of investment financed with bank credit. Using a sample of Italian SMEs, we find evidence that product market competition impacts positively on the share of investment financed with bank credit only when outsiders are absent. (A shorter version of this working paper has been published in SMALL BUSINESS ECONOMICS)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://pro1.unibz.it/projects/economics/repec/bemps29.pdf
Download Restriction: no

File URL: https://link.springer.com/article/10.1007/s11187-017-9838-x
Download Restriction: no

Paper provided by Faculty of Economics and Management at the Free University of Bozen in its series BEMPS - Bozen Economics & Management Paper Series with number BEMPS29.

as
in new window

Length: [45 pages]
Date of creation: Jun 2015
Handle: RePEc:bzn:wpaper:bemps29
Contact details of provider: Postal:
VIA SERNESI, 1 - 39100 BOLZANO

Phone: +39 0471 315 000
Fax: +39 0471 315 009
Web page: https://www.unibz.it/en/faculties/economics-management/research/
Email:


More information through EDIRC

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.:

as
in new window


  1. Beck, Thorsten & Demirguc-Kunt, Asli, 2006. "Small and medium-size enterprises: Access to finance as a growth constraint," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2931-2943, November.
  2. Cerasi Vittoria & Fedele Alessandro, 2011. "Does Product Market Competition Increase Credit Availability?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-27, July.
  3. Valta, Philip, 2012. "Competition and the cost of debt," Journal of Financial Economics, Elsevier, vol. 105(3), pages 661-682.
  4. Cerasi, Vittoria & Chizzolini, Barbara & Ivaldi, Marc, 2009. "The Impact of Mergers on the Degree of Competition in the Banking Industry," IDEI Working Papers 582, Institut d'Économie Industrielle (IDEI), Toulouse, revised 07 Jun 2012.
  5. Shleifer, Andrei & Vishny, Robert W, 1992. " Liquidation Values and Debt Capacity: A Market Equilibrium Approach," Journal of Finance, American Finance Association, vol. 47(4), pages 1343-1366, September.
  6. Acharya, Viral V. & Bharath, Sreedhar T. & Srinivasan, Anand, 2007. "Does industry-wide distress affect defaulted firms? Evidence from creditor recoveries," Journal of Financial Economics, Elsevier, vol. 85(3), pages 787-821, September.
  7. Thomas Chaney & David Sraer & David Thesmar, 2012. "The Collateral Channel: How Real Estate Shocks Affect Corporate Investment," American Economic Review, American Economic Association, vol. 102(6), pages 2381-2409, October.
  8. Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-126, April.
  9. Schmalensee, Richard, 1977. "Using the H-Index of Concentration with Published Data," The Review of Economics and Statistics, MIT Press, vol. 59(2), pages 186-193, May.
  10. Benmelech, Efraim & Bergman, Nittai K., 2009. "Collateral pricing," Journal of Financial Economics, Elsevier, vol. 91(3), pages 339-360, March.
  11. Valta, Philip & Frésard , Laurent, 2014. "How Does Corporate Investment Respond to Increased Entry Threat?," Les Cahiers de Recherche 1046, HEC Paris.
  12. Bengt Holmstrom & Jean Tirole, 1997. "Financial Intermediation, Loanable Funds, and The Real Sector," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 663-691.
  13. Norden, Lars & van Kampen, Stefan, 2013. "Corporate leverage and the collateral channel," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5062-5072.
  14. Gavazza, Alessandro, 2010. "Asset liquidity and financial contracts: Evidence from aircraft leases," Journal of Financial Economics, Elsevier, vol. 95(1), pages 62-84, January.
  15. Efraim Benmelech & Nittai K. Bergman, 2011. "Bankruptcy and the Collateral Channel," Journal of Finance, American Finance Association, vol. 66(2), pages 337-378, April.
  16. Gan, Jie, 2007. "Collateral, debt capacity, and corporate investment: Evidence from a natural experiment," Journal of Financial Economics, Elsevier, vol. 85(3), pages 709-734, September.
  17. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
  18. Berger, Allen N & Udell, Gregory F, 1995. "Relationship Lending and Lines of Credit in Small Firm Finance," The Journal of Business, University of Chicago Press, vol. 68(3), pages 351-381, July.
  19. Hernán Ortiz-Molina & Gordon M. Phillips, 2010. "Asset Liquidity and the Cost of Capital," NBER Working Papers 15992, National Bureau of Economic Research, Inc.
  20. Rajan, Raghuram G, 1992. " Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt," Journal of Finance, American Finance Association, vol. 47(4), pages 1367-1400, September.
  21. Huang, Hsing-Hua & Lee, Han-Hsing, 2013. "Product market competition and credit risk," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 324-340.
  22. Giacinta Cestone, 1999. "Corporate Financing and Product Market Competition: An Overview," CSEF Working Papers 18, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bzn:wpaper:bemps29. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (F. Marta L. Di Lascio)

or (Alessandro Fedele)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.