Bank competition and firm creation
Emilia Bonaccorsi di Patti () and
Giovanni Dell'ariccia ()
No 481, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area
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)
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Journal Article: Bank Competition and Firm Creation (2004)
Working Paper: Bank Competition and Firm Creation (2001)
Working Paper: Bank competition and firm creation (2000)
Working Paper: Bank Competition and Firm Creation (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_481_03
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