Bank competition, financing obstacles, and access to credit

Thorsten Beck, Asl' Demirguc-Kant and Vojislav Maksimovic
Authors registered in the RePEc Author Service: Asli Demirguc-Kunt

No 2996, Policy Research Working Paper Series from The World Bank

Abstract: Theory makes ambiguous predictions about the effects of bank concentration on access to external finance. Using a unique data base for 74 countries offinancing obstacles and financing patterns for firms of small, medium, and large size, the authors assess the effects of banking market structure on financing obstacles and the access of firms to bank finance. The authors find that bank concentration increases financing obstacles and decreases the likelihood of receiving bank finance, with the impact decreasing in size. The relation of bank concentration and financing obstacles is dampened in countries with well developed institutions, higher levels of economic and financial development, and a larger share of foreign-owned banks. The effect is exacerbated by more restrictions on banks'activities, more government interference in the banking sector, and a larger share of government-owned banks. Finally, it is possible to alleviate the negative impact of bank concentration on access to finance by reducing activity restrictions.

Keywords: Financial Intermediation; Banks&Banking Reform; Decentralization; Payment Systems&Infrastructure; Financial Crisis Management&Restructuring; Financial Intermediation; Banks&Banking Reform; Housing Finance; Economic Theory&Research; Financial Crisis Management&Restructuring (search for similar items in EconPapers)
Date: 2003-03-31
New Economics Papers: this item is included in nep-com, nep-fin and nep-mfd
References: Add references at CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... d/PDF/multi0page.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:2996

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().