Repository logo
Documentos

Documentos

Libros

Libros

Investigadores

Investigadores

Grupos

Grupos

Universidades

Universidades

Nosotros

Nosotros

 

Bank Market Power and Firm Finance: Evidence from Bank and Loan Level Data

Authors

Tamayo, Cesar E.
Gomez-Gonzalez, Jose Eduardo
Valencia, Oscar

Editor

Publication date

2019-08-29

Document language

eng

Publisher

Metrics
downloads: 0
abstract_views: 0

Journal Title

Journal ISSN

Volume Title

Abstract

We 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.

Description

Códigos JEL

G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages, D22 - Firm Behavior: Empirical Analysis, O16 - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

item.page.subjectjelspa

Keywords

Bank competition, Market power, Boone, Lerner, Colombia, Cost of firm finance, Loan-level data.

Keywords

Groups

Citation

URI

https://repositorio.redinvestigadores.org/handle/Riec/39
 https://repository.eafit.edu.co/bitstream/handle/10784/13833/WP_2019_11_Jose_E_Gomez-Gonzalez_Cesar_E_Tamayo_%20Oscar_M_Valencia.pdf?sequence=2&isAllowed=y
 https://ideas.repec.org/p/rie/riecdt/20.html
 https://ideas.repec.org/p/rie/riecdt/20.html

Collections

Documentos de Trabajo