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Cited by 399Banking stability, regulation, efficiencyFirm Innovation and GrowthMonetary Policy and Economic Impact

Bank competition and firm creation

Open access
Bonaccorsi di Patti, Emilia, Dell'Ariccia, Giovanni·2004·Journal of Money, Credit, and Banking
DOI 10.1353/mcb.2004.0011
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Abstract

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. WP/Ol121This paper investigates the empirical relationship between competition in the financial sector and the creation of firms in the non-financial sector.It finds that bank competition has an overall positive effect on firm creation.However, consistent with theories of banking arguing that competition may reduce the availability of credit to informationally opaque firms, it also finds that asymmetric information limits the overall positive effect of bank competition on firm creation.Indeed, bank competition is less favorable to the emergence of new firms in industrial sectors where informational asymmetries are more important, and in extreme cases has a negative effect.

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Crossref · 10.1353/mcb.2004.0011

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  • Entry is higher in informationally opaque industries in Italian regions that have a more concentrated banking sector.

    “Di Patti and Dell'Ariccia (2004) find that entry is higher in informationally opaque industries in Italian regions that have a more concentrated banking sector.”

    From Entry regulation as a barrier to entrepreneurship (2006) · cites this paper as Di Patti and Dell'Ariccia (2004)

    The Conclusions report that competition is relatively more beneficial to firm birth in less opaque industries, consistent with the cited comparison. But the Economy-Wide Effect section finds a nonlinear relationship: for relatively opaque industries, firm birth rises with concentration only up to a point and then falls. The claim omits that qualification; the study also measures Italian provinces rather than regions. (LLM, conf=0.88)

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Cites

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Research works printed but not linked: 1

  1. [3]3. Berger, A., and G. Udell, 1998, "The Economics of Small Business Finance: The Role of Private and Debt Markets in the Financial Growth Cycle," Journal of Banking and Finance 22 (6-8): 613-673.

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Authors
Bonaccorsi di Patti, E., & Dell'Ariccia, G.
Venue
Journal of Money, Credit, and Banking
Publisher
Project MUSE
Published
2004
Volume
36
Issue
2
Pages
225-251
ISSN
  • 0022-2879 (ISSN-L)
  • 1538-4616
DOI
10.1353/mcb.2004.0011
OpenAlex
W3121331558
Cited by
399
References
35
Citations by year
2026: 4 · 2025: 7 · 2024: 12 · 2023: 13 · 2022: 12 · 2021: 12 · 2020: 15 · 2019: 17 · 2018: 12 · 2017: 14 · 2016: 16 · 2015: 21 · 2014: 17 · 2013: 16 · 2012: 16
FWCI
63.70
Type
journal article
Language
en
Open access
Locations
Journal of money credit and banking (publishedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
Keywords
bank competition, startups, information asymmetry, access to credit, manufacturing industry, financial sector competition

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