Do your Rivals Enhance your Access to Credit? Theory and Evidence

Vittoria Cerasi, Alessandro Fedele and Raffaele Miniaci

No BEMPS29, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: In this paper, we unveil a disregarded benefit of product market competition for small and medium enterprises (SMEs). In a model where firms are financed through collateralized bank loans and compete à la Cournot, we introduce a probability of bankruptcy. We investigate how the number of rivals and the existence of outsiders willing to acquire productive assets of distressed incumbents affect the equilibrium share of investment financed with bank credit. Using a sample of Italian SMEs, we find evidence that product market competition impacts positively on the share of investment financed with bank credit only when outsiders are absent. (A shorter version of this working paper has been published in SMALL BUSINESS ECONOMICS)

Keywords: product market competition; collateralized bank loans; productive assets (search for similar items in EconPapers)
JEL-codes: D22 G33 G34 L13 (search for similar items in EconPapers)
Pages: [45 pages]
Date: 2015-06
New Economics Papers: this item is included in nep-com and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.unibz.it/bemps29.pdf (application/pdf)
https://link.springer.com/article/10.1007/s11187-017-9838-x

Related works:
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:bzn:wpaper:bemps29

Access Statistics for this paper

More papers in BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen Contact information at EDIRC.
Bibliographic data for series maintained by F. Marta L. Di Lascio () and Alessandro Fedele ().