The effects of bank market power in short-term and long-term firm credit availability and investment

Santiago Carbo-Valverde; José Manuel Mansilla-Fernández; Francisco Rodríguez-Fernández

doi:10.1080/02102412.2016.1242239

The effects of bank market power in short-term and long-term firm credit availability and investment

Santiago Carbo-Valverde
, José Manuel Mansilla-Fernández
, Francisco Rodríguez-Fernández

The Albert Gubay Business School

University of Bologna
University of Granada

Research output: Contribution to journal › Article › peer-review

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Abstract

This article investigates the short-term and long-term effects of bank market power on the availability of credit for companies, and on firm investment. Our results suggest that an increase in bank market power reduces firms’ credit availability and investment in the short-term, but firm investment recovers in the long-term. The economic significance of these relationships is found to be larger for SMEs than for other (larger) firms.

Original language	English
Journal	Spanish Journal of Finance and Accounting
Volume	46
DOIs	https://doi.org/10.1080/02102412.2016.1242239
Publication status	Published - 21 Nov 2016

Keywords

Bank Loans
Bank Market Power
Euler equation
Firm investment rate
Risk Premium

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10.1080/02102412.2016.1242239

2016 Bank Market PowerAccepted author manuscript, 421 KB

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title = "The effects of bank market power in short-term and long-term firm credit availability and investment",

abstract = "This article investigates the short-term and long-term effects of bank market power on the availability of credit for companies, and on firm investment. Our results suggest that an increase in bank market power reduces firms{\textquoteright} credit availability and investment in the short-term, but firm investment recovers in the long-term. The economic significance of these relationships is found to be larger for SMEs than for other (larger) firms.",

keywords = "Bank Loans, Bank Market Power, Euler equation, Firm investment rate, Risk Premium",

author = "Santiago Carbo-Valverde and Mansilla-Fern{\'a}ndez, \{Jos{\'e} Manuel\} and Francisco Rodr{\'i}guez-Fern{\'a}ndez",

note = "Financial support from MICINN-FEDER ECO2015-67656-P, ECO2014-59584 and Junta de Andaluc{\'i}a P12.SEJ.2463 ",

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AU - Carbo-Valverde, Santiago

AU - Mansilla-Fernández, José Manuel

AU - Rodríguez-Fernández, Francisco

N1 - Financial support from MICINN-FEDER ECO2015-67656-P, ECO2014-59584 and Junta de Andalucía P12.SEJ.2463

PY - 2016/11/21

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N2 - This article investigates the short-term and long-term effects of bank market power on the availability of credit for companies, and on firm investment. Our results suggest that an increase in bank market power reduces firms’ credit availability and investment in the short-term, but firm investment recovers in the long-term. The economic significance of these relationships is found to be larger for SMEs than for other (larger) firms.

AB - This article investigates the short-term and long-term effects of bank market power on the availability of credit for companies, and on firm investment. Our results suggest that an increase in bank market power reduces firms’ credit availability and investment in the short-term, but firm investment recovers in the long-term. The economic significance of these relationships is found to be larger for SMEs than for other (larger) firms.

KW - Bank Loans

KW - Bank Market Power

KW - Euler equation

KW - Firm investment rate

KW - Risk Premium

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M3 - Article

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VL - 46

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JF - Spanish Journal of Finance and Accounting

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The effects of bank market power in short-term and long-term firm credit availability and investment

Abstract

Keywords

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