Industrial Loans and Market Structure

Miguel González-Maestre and L.M. Granero

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: This paper is concerned with the interactions between the structure of the banking sector and the product market. We consider a framework where firms' installation costs are financed by means of industrial loans from specialized banks. Initially, we assume that an exogenous number of banks compete in providing loans before the firms compete in prices in a market with product differentiation. We show that even a small decrease in the number of banks can cause a dramatic fall in competition among firms.

Keywords: BANKS; LOANS; OLIGOPOLIES (search for similar items in EconPapers)
JEL-codes: G21 L10 (search for similar items in EconPapers)
Pages: 20 pages
Date: 1997
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Citations: View citations in EconPapers (2)

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Journal Article: Industrial loans and market structure (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:396.97

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