Bank Competition and Firm Creation

We investigate the effects of competition in the financial sector on the creation of firms in the nonfinancial sector, explicitly allowing for heterogeneous effects across borrowers characterized by different degrees of asymmetric information. We find evidence of a bell-shaped relationship between b...

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Veröffentlicht in:	Journal of money, credit and banking credit and banking, 2004-04, Vol.36 (2), p.225-251
Hauptverfasser:	di Patti, Emilia Bonaccorsi, Dell'Ariccia, Giovanni
Format:	Artikel
Sprache:	eng
Schlagworte:	Asymmetric information Bank credit Bank loans Bank markets Banking Banking industry Business enterprises Business studies Competition Competition (Economics) Competition between banks Credit supply Data analysis Economic competition Economic conditions Enterprises Finance Industrial market Industry Influence Market power Monetary economics Opacity Organization formation Startups Studies
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Beschreibung
Zusammenfassung:	We investigate the effects of competition in the financial sector on the creation of firms in the nonfinancial sector, explicitly allowing for heterogeneous effects across borrowers characterized by different degrees of asymmetric information. We find evidence of a bell-shaped relationship between bank competition and firm creation. In addition, consistently with theories arguing that competition may reduce the availability of credit to informationally opaque firms, we find that bank competition results less favorable to the emergence of new firms in industrial sectors where informational asymmetries are more important.
ISSN:	0022-2879 1538-4616 1538-4616
DOI:	10.1353/mcb.2004.0011