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Finance as a Barrier to Entry: Bank Competition and Industry Structure in Local U.S. Markets

Year: 2006

Type: article

Abstract: ABSTRACT This paper tests how competition in local U.S. banking markets affects the market structure of nonfinancial sectors. Theory offers competing hypotheses about how competition ought to influence firm entry and access to bank credit by mature firms. The empirical evidence, however, strongly supports the idea that in markets with concentrated banking, potential entrants face greater difficulty gaining access to credit than in markets in which banking is more competitive.

Source: The Journal of Finance

DOI: 10.1111/j.1540-6261.2006.00841.x

Authors: NICOLA CETORELLI, PHILIP E. STRAHAN

Institutions: Wesleyan University, Federal Reserve Bank of New York, Federal Reserve Bank of Chicago

Language: English

Topic: Banking stability, regulation, efficiency

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3124451138

FWCI: 62.37

Cites: 72

Cited by: 922

Related to: 10