Bank market power and firm performance

Manthos Delis (), Sotirios Kokas and Steven Ongena

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: Does bank market power affect firm performance? We answer this question by examining 25,236 syndicated loan facilities granted between 2000 and 2010 by 296 banks to 9,029 US non-financial firms. Even though recently poorly-performing firms obtain loans from banks with more market power, we find that in the year after loan origination bank market power positively affects firm performance, albeit mostly for moderate levels of market power. Our estimates thus suggest that a moderate level of bank market power not only facilitates access to credit by poorly-performing firms but also boosts the performance of those firms that obtain it.

Keywords: Bank market power; Lerner index; Firm performance; Syndicated loans (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015-02
New Economics Papers: this item is included in nep-bec, nep-com and nep-eff
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Citations: View citations in EconPapers (3)

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Journal Article: Bank Market Power and Firm Performance (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:02-2015

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