SNFs publikasjonsserier


Type/nr Tittel og forfatter Last ned gratis
A04/18 Proximity in Bank-Borrower Relationships. Are Small and Newly Established Firms Hit Harder by Bank Branch Closures?
Ragnhild Grønn Johannessen og Frida Lobenz Skarstein
last ned
 

This paper investigates the effect of competition on the relation between borrowers’ risk and interest rates in the market for business loans. I estimate the relationship between the loan rates and risk of closure conditional on the local market structure using detailed data on loan payments between individual firms and banks from Norway. The findings show that increased competition is associated with lower rates for less risky and higher rates for more risky loans. Comparing markets with three competing banks compared to a single bank, rates for loans to firms that closed down during the loan period were approximately 50 basis points higher, while loans to firms that did not close down were approximately 20 basis points lower.

 
Pris NOK 190,-  
Språk Skrevet på Engelsk