Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94004
Authors: 
Fidrmuc, Jarko
Hainz, Christa
Year of Publication: 
2008
Series/Report no.: 
SFB/TR 15 Discussion Paper 248
Abstract: 
The current economic policy discussion on financial integration in the European Union concentrates on cross-border mergers. We study the impact of cross-border lending in a theoretical model where banks acquire either hard or soft information on borrowing firms and predict that the closer firms are to the border the more likely banks are to offer them cross-border loans. This hypothesis is confirmed in the ifo Business Climate Survey that reports the perceptions of German firms on banks lending behavior between 2003 and 2006. In contrast to the policy of harmonization, differences in bank regulations may provide incentives for cross-border lending. Thus, we show that financial integration may take place from the bottom up.
Subjects: 
Financial Integration
SMEs
Banking Supervision
Business Surveys
Threshold Analysis
JEL: 
G18
G21
C25
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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