Bank competition and the cost of debt: the role of state ownership and firm size
Houjian Li and
Applied Economics Letters, 2018, vol. 25, issue 13, 951-957
The argument on the puzzling relationship between bank competition and the cost of debt remains inconclusive as the effects of state ownership and firm size are intertwined. We find that bank competition is negatively associated with the cost of debt and observe that the negative effect of bank competition is stronger for state-owned enterprises (SOEs) and weaker for large-sized enterprises. Our findings accord with the market power hypothesis. State ownership strengthens the negative impact of bank competition on the cost of debt, but firm size tends to weaken it. SOEs and large-sized enterprises are associated with a lower cost of debt compared to non-SOEs and small- and medium-sized enterprises, respectively.
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
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:taf:apeclt:v:25:y:2018:i:13:p:951-957
Ordering information: This journal article can be ordered from
Access Statistics for this article
Applied Economics Letters is currently edited by Anita Phillips
More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().