Bank Ownership Structure, SME Lending and Local Credit Markets

Iftekhar Hasan, Krzysztof Jackowicz, Oskar Kowalewski () and Lukasz Kozlowski
Additional contact information
Krzysztof Jackowicz: Kozminski University
Lukasz Kozlowski: Bank BGZ BNP Paribas SA

Working Papers from University of Pennsylvania, Wharton School, Weiss Center

Abstract: In this paper, by employing a novel approach, we study the relationship between bank type and small-business lending in a post-transition country. Using a unique dataset on bank branches and firm-level data, we find that local cooperative banks lend more to small businesses than do large domestic banks and foreign-owned banks, even when controlling for the financial situation of the cooperative banks. Additionally, our results suggest that cooperative banks provide loans to small businesses at lower costs than foreign-owned banks or large domestic banks. Finally, we show that small and medium-sized firms perform better in counties with a large number of cooperative banks than in counties dominated by foreignowned banks or large domestic banks. Our results are important from a policy perspective, as they show that foreign bank entry and industry consolidation may raise valid concerns for small firms in developing countries.

JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-eff, nep-ent and nep-sbm
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Citations: View citations in EconPapers (8)

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Working Paper: Bank ownership structure, SME lending and local credit markets (2014)
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