Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94171
Authors: 
Hainz, Christa
Year of Publication: 
2008
Series/Report no.: 
SFB/TR 15 Discussion Paper 244
Abstract: 
The effects of bank competition and institutions on credit markets are usually studied separately although both factors are interdependent. We study the effect of bank competition on the choice of contracts (screening versus collateralized credit contract) and explicitly capture the impact of the institutional environment. Most importantly, we show that the effects of bank competition on collateralization, access to finance, and social welfare depend on the institutional environment. We predict that firms' access to credit increases in bank competition if institutions are weak but bank competition does not matter if they are well-developed.
Subjects: 
Bank competition
collateralization
screening
incentives
JEL: 
D82
G21
K00
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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