Bank competition and firm creation

Emilia Bonaccorsi Di Patti () and Giovanni Dell'ariccia ()
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Emilia Bonaccorsi Di Patti: Banca d'Italia

No 481, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research Department

Abstract: We investigate the effects of competition in the banking sector on the creation of firms in the non-financial sector, explicitly allowing for heterogeneous effects across borrowers characterized by different degrees of asymmetric information. We find evidence of a bellshaped relationship between bank competition and firm creation. In addition, consistent with models finding that competition may reduce the availability of credit to informationally opaque firms, we find that bank competition is less favorable to the emergence of new firms in industries where information asymmetries are greater.

Keywords: commercial banks; competition; asymmetric information; new businesses (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2003-06
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Related works:
Working Paper: Bank Competition and Firm Creation
Journal Article: Bank competition and firm creation (2000)
Journal Article: Bank Competition and Firm Creation (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:bdi:wptemi:td_481_03

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