Bank Competition and Firm Creation

By Emilia Bonaccorsi di Patti, Giovanni Dell'Ariccia. Social Science Research Network, 2004

385 citations recorded by the source corpus.

We investigate the effects of competition in the financial sector on the creation of firms in the nonfinancial sector, explicitly allowing for heterogeneous effects across borrowers characterized by different degrees of asymmetric information. We find evidence of a bell-shaped relationship between bank competition and firm creation. In addition, consistently with theories arguing that competition may reduce the availability of credit to informationally opaque firms, we find that bank competition results less favorable to the emergence of new firms in industrial sectors where informational asymmetries are more important.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/327452cb62749627cfae16297fe4af1f85828ba4

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Citations in the corpus

A More Complete Conceptual Framework for Financing of Small and Medium Enterprises (2005, background): “…finding generally unfavorable effects from market power (e.g., Elsas 2005, Karceski, Ongena, and Smith 2005, Cetorelli and Strahan 2006), and others finding favorable effects (e.g., Petersen and Rajan 1995, Cetorelli and Gambera 2001, Bonaccorsi di Patti and Dell’Ariccia 2004, Cetorelli 2004).12 4.”
Do Small Businesses Still Prefer Community Banks (2013, background): “…activity, and general economic performance find both favorable effects (e.g., Petersen and Rajan 1995, Cetorelli and Gambera 2001, Bonaccorsi di Patti and Dell’Ariccia 2004, Cetorelli 2004) and unfavorable effects (e.g., Black and Strahan 2002, Berger, Hasan, and Klapper 2004, Karceski,…”
Bank Competition and Financial Stability : Friends or Foes? (2008, background): “…enterprises as they know that they can regain the initial investment in the relationship at a later stage (Petersen and Rajan, 1995; Bonaccorsi di Patti and Dell’Ariccia, 2004), other empirical papers point to the healthy effect of competition on availability of lending to SMEs (Cetorelli and…”
Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance (2016, background): “Guiso et al. (2008) notes that, among European countries, there is a correlation of 0.56 in per-capita income between the beginning and the end of the last century. Italy is a typical example of persistent regional economic disparities: the literature on the so-called “questione meridionale”, the so”
Bank Financing for SMEs – Lessons from the Literature (2013, neutral): “Similarly, Bonacorsi di Patti and Dell’Ariccia (2004) show for Italy that bank concentration is conducive to access to external finance in industries that are less transparent, thus more reliant on long-term relationships.”