Banking Market Concentration and Credit Availability to Small Businesses
This paper examines how banking market concentration affects small businesses finance. Using the Survey of Small Business Finance, the empirical model show that bank concentration may adversely affect the amount of credit supplied to small businesses. We find that bank concentration decreases the L/C limits of firms significantly, while there is no statistically significant difference in L/C balance across banking markets. We also show that bank concentration lowers the overall debt-to-asset ratio of small firms that includes loans from nonbank institutions, suggesting that credit from non-bank institutions do not fully make up the effect of bank concentration.
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- Mitchell A. Petersen & Raghuram G. Rajan, 1995.
"The Effect of Credit Market Competition on Lending Relationships,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 110(2), pages 407-443.
- Mitchell A. Petersen & Raghuram G. Rajan, 1994. "The Effect of Credit Market Competition on Lending Relationships," NBER Working Papers 4921, National Bureau of Economic Research, Inc.
- Donald P. Morgan & Bertrand Rime & Philip E. Strahan, 2001. "Bank integration and business volatility," Staff Reports 129, Federal Reserve Bank of New York.
- Donald Morgan & Bertrand Rime & Philip E. Strahan, 2001. "Bank Integration and Business Volatility," Center for Financial Institutions Working Papers 02-10, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Shaffer, Sherrill, 1998. "The Winner's Curse in Banking," Journal of Financial Intermediation, Elsevier, vol. 7(4), pages 359-392, October.
- Sherrill Shaffer, 1997. "The winner's curse in banking," Working Papers 97-25, Federal Reserve Bank of Philadelphia.
- Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March. Full references (including those not matched with items on IDEAS)
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