Bank Competition, Financing Obstacles, and Access to Credit

By Thorsten Beck. 2003

113 citations recorded by the source corpus.

Theory makes ambiguous predictions about the effects of bank concentration on access to external finance. Using a unique data base for 74 countries of financing obstacles and financing patterns for firms of small, medium, and large size, the authors assess the effects of banking market structure on financing obstacles and the access of firms to bank finance. The authors find that bank concentration increases financing obstacles and decreases the likelihood of receiving bank finance, with the impact decreasing in size. The relation of bank concentration and financing obstacles is dampened in countries with well developed institutions, higher levels of economic and financial development, and a larger share of foreign-owned banks. The effect is exacerbated by more restrictions on banks' activities, more government interference in the banking sector, and a larger share of government-owned banks. Finally, it is possible to alleviate the negative impact of bank concentration on access to finance by reducing activity restrictions.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/759ca2a8fabf5dedb4a0946edd5836b1d70ead37

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. E. Detragiache
2. Poonam Gupta
3. T. Tressel
4. Philipp Schnabl
5. Stijn Claessens
6. Neeltje van Horen

In Finance

1. E. Detragiache
2. T. Tressel
3. Poonam Gupta
4. Jakob de Haan
5. Stijn Claessens
6. Thorsten Beck
7. Philipp Schnabl
8. J. Klomp

Citations in the corpus

• Banks and Innovation: Microeconometric Evidence on Italian Firms (2008, unknown): “Cross country evidence suggests that bank concentration decreases the likelihood of bank finance, with the impact decreasing in firm size (see Beck, Demirguc-Kunt, and Maksimovic (2003)).”
• Bank concentration, competition, and financial inclusion (2018, unknown): “This contrasts with Beck et al (2003) that finds for a panel of countries that bank concentration increases firms’ financing obstacles and decreases the likelihood of receiving bank finance with the effect being exacerbated by more restrictions on banks’ activities.”
• Foreign Banks in Poor Countries: Theory and Evidence (2008, background): “Indicators of access to financial services are from Beck et al. (2005). They include, among others, the extent of the branch and ATM networks, measuring the outreach of financial services, and the number of loans and deposit accounts, measuring actual usage of such services.”