Bernini, M. and Montagnoli, A. (2017) Competition and financial constraints: a two-sided story. Journal of International Money and Finance, 70. pp. 88-109. ISSN 0261-5606
Abstract
This paper examines the relation between competitive pressure and financial constraints using firm-level survey data from 27 emerging economies of Eastern Europe and Central Asia for the years 2005 and 2009. In the empirical analysis, we disentangle the impact of product market competition on the demand and supply of credit. Our results support the hypothesis that competitive pressure on borrowers affects both sides of the credit market. We find that in industries with greater competitive pressure firms’ demand for credit is typically higher but a greater proportion of firms are discouraged from loan application due to greater cost of credit. Interestingly, we find the detrimental effect of competitive pressure on credit access breaks down when firms are audited, when they can pledge collateral and when they engage in export activities. These results point to the role of competitive pressure in the lenders’ information set when limited information is available
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2016 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http:// creativecommons.org/licenses/by-nc-nd/4.0/). |
Keywords: | Financial constraints; Credit rationing; Competition; Transition |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 15 Aug 2016 09:16 |
Last Modified: | 15 Jan 2021 14:25 |
Published Version: | http://dx.doi.org/10.1016/j.jimonfin.2016.07.003 |
Status: | Published |
Publisher: | Elsevier |
Refereed: | Yes |
Identification Number: | 10.1016/j.jimonfin.2016.07.003 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:103586 |