Bank Competition and Enterprise restructuring in Transition Economies

Monika Schnitzer ()

No 2045, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We investigate how bank competition affects the efficiency of credit allocation, using a model of spatial competition. Our analysis shows that bad loans are more likely the larger the number of banks competing for customers. We study further how many banks will be active if market entry is not regulated. Free entry can induce too much entry and thus too many bad loans compared to the social optimum. Finally, we analyse how bank competition affects the firms' restructuring effort. We find that restructuring has positive externalities that give rise to multiple equilibria, with either much or little restructuring activity.

Keywords: Bank Competition; market entry; Restructuring; screening; Transition Economies (search for similar items in EconPapers)
JEL-codes: D43 G21 G34 L13 P31 P34 (search for similar items in EconPapers)
Date: 1998-12
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2045 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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:cpr:ceprdp:2045

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2045

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().