Bank market power and discouraged SMEs : international evidence

Duc Nguyen Nguyen, Anil V. Mishra, Kevin Daly

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

This study investigates the relationship between bank market power and firms’ financing constraints, indicated by the likelihood of being discouraged from applying for bank loans. The full data sample covers more than 72,000 small and medium-size enterprises (SMEs) in 113 countries around the world. Our results from a probit selection model indicate that higher bank market power is associated with a lower likelihood of financial constraint. In addition, when we allow for a nonmonotonic effect, we document a U-shaped relationship between them. Our results are robust to various measures of bank market power and an alternative measure of financing constraints. Lastly, we show that the depth of the credit information-sharing mechanism plays a moderating role in the bank market power–discouragement nexus.
Original languageEnglish
Pages (from-to)1045-1061
Number of pages17
JournalBorsa Istanbul Review
Volume22
Issue number6
Publication statusPublished - 2022

Open Access - Access Right Statement

© 2022 Borsa ˙Istanbul Anonim S¸ irketi. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Fingerprint

Dive into the research topics of 'Bank market power and discouraged SMEs : international evidence'. Together they form a unique fingerprint.

Cite this