The Impact of Competition on Bank Orientation and Specialization

Hans Degryse and Steven Ongena

No 4543, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How do banks react to increased competition? Recent banking theory offers conflicting predictions about the impact of competition on bank orientation - i.e., the choice of relationship based versus transactional banking - and bank industry specialization. We empirically investigate the impact of interbank competition on bank branch orientation and specialization. We employ a unique dataset containing detailed information on bank-firm relationships and industry classification. We find that bank branches facing stiff local competition engage considerably more in relationship-based lending and specialize somewhat less in a particular industry. Our results illustrate that competition and relationships are not necessarily inimical.

Keywords: Bank orientation; Bank industry specialization; Competition; Lending relationships (search for similar items in EconPapers)
JEL-codes: G21 L11 L14 (search for similar items in EconPapers)
Date: 2004-08
New Economics Papers: this item is included in nep-com
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://cepr.org/publications/DP4543 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The Impact of Competition on Bank Orientation and Specialization (2003)
Working Paper: The Impact of Competition on Bank Orientation and Specialization (2003)
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:cpr:ceprdp:4543

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4543

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().