2019-10-112019-10-112019-08-29https://repositorio.redinvestigadores.org/handle/Riec/39We present new measures of market power for the banking industry in Colombia and estimate their effect on the cost of credit for non-financial firms. Our results suggest that bank competition increased during the 2006-2008 period –even as concentration increased– but decreased thereafter. Using a unique combination of loan, firm and bank-level datasets we are also able to show that banks loosing overall market power –measured by the average price-cost margin– decrease interest rates to small firms, but increase rates to firms with which they have the oldest credit relationships. This suggests (i) the existence of market power that is specific to the bank-firm relationship (i.e., informational lock-in and hold-up problems due to switching costs), and (ii) that size may be capturing other firm attributes such as observable risk, scale effects or implicit collateral.29 páginasPDFengOpen AccessWorking paperG21 - Banks; Depository Institutions; Micro Finance Institutions; MortgagesD22 - Firm Behavior: Empirical AnalysisO16 - Financial Markets; Saving and Capital Investment; Corporate Finance and GovernanceBank competitionMarket powerBooneLernerColombiaCost of firm financeLoan-level data.Sistema bancario -- Colombia -- 2006-2008Riesgo crediticio -- Colombia -- 2006-2008Instituciones financieras -- Colombia -- 2006-2008Sistema bancario -- Colombia -- 2006-2008Acceso abiertoAtribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0