Personal Bankruptcy and Credit Market Competition

Astrid A. Dick and Andreas Lehnert ()

Journal of Finance, 2010, vol. 65, issue 2, 655-686

Abstract: We document a link between U.S. credit supply and rising personal bankruptcy rates. We exploit the exogenous variation in market contestability brought on by banking deregulation—the relaxation of entry restrictions in the 1980s and 1990s—at the state level. We find deregulation explains at least 10% of the rise in bankruptcy rates. We also find that deregulation leads to increased lending, lower loss rates on loans, and higher lending productivity. Our findings indicate that increased competition prompted banks to adopt sophisticated credit rating technology, allowing for new credit extension to existing and previously excluded households.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (98)

Downloads: (external link)
https://doi.org/10.1111/j.1540-6261.2009.01547.x

Related works:
Working Paper: Personal bankruptcy and credit market competition (2007)
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:bla:jfinan:v:65:y:2010:i:2:p:655-686

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().