Credit portability and spreads: Evidence in the Brazilian market
Paulo Ribeiro and
Journal of Economics and Business, 2019, vol. 106, issue C
Credit portability is frequently advocated as a mechanism to foster competition in the banking industry, to lower spreads and to contribute to the development of financial intermediation. Yet there were no empirical studies that measured the effect of this policy on spreads. This article evaluates the effect of the portability resolution in the Brazilian credit market that was intended to facilitate borrowers to change from one financial institution to another whenever they have access to better credit conditions. By lowering switching costs, the portability resolution promotes competition among incumbent banks and consequently reduces credit spreads. Using difference-in-differences with matching estimation for 231 Brazilian financial institutions, we find that credit spreads for types of credit susceptible to portability become significantly lower than credit spreads for other types of credit that were not benefited by the new law.
Keywords: Credit; Portability; Competition; Spread (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:106:y:2019:i:c:s0148619518300596
Access Statistics for this article
Journal of Economics and Business is currently edited by Kenneth J. Kopecky
More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Haili He ().