Abstract
This paper examines how banking market concentration affects small business credit. Based on an idea that line-of-credit (L/C) limit and L/C balance provide useful proxies for credit supply to and credit demand of a firm, we examine the effect of bank concentration on L/C limits and L/C balances. Using Heckman selection models to correct for sample selection, bank concentration is found to lower limits of L/Cs, where there was no statistically significant difference in L/C balances. We also find that small firms in concentrated banking markets have lower overall institutional debt-to-asset ratios.
JEL Codes
G21, G32, L25
Keywords
Banking , Concentration , Credit
Recommended Citation
Park, Yongjin
(2008)
"Banking Market Concentration and Credit Availability to Small Businesses,"
Journal of Entrepreneurial Finance and Business Ventures:
Vol. 12:
Iss.
3, pp. 47-69.
DOI: https://doi.org/10.57229/2373-1761.1237
Available at:
https://digitalcommons.pepperdine.edu/jef/vol12/iss3/4
