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Competition and stability in the credit industry: banking vs. factoring industries

Competition and stability in the credit industry: banking vs. factoring industries
Competition and stability in the credit industry: banking vs. factoring industries
Over the last decade, most credit-industries registered a decline in lending volumes, while factoring industries instead registered a substantial growth in terms of turnover. Surprisingly, only a handful of papers so far investigate factoring companies. Do factoring firms display the same stability levels of banks? Is the competition similar in factoring and banking industries? Is the relationship between competition and stability the same in these industries? Focusing on Italy (one of the largest factoring and banking markets in Europe) and using a unique dataset, we show three main results: factoring companies are (on average) more stable than banks; 2) the stability of factoring companies increase when competition declines (competition-fragility view); 3) the competition-fragility view is weaker in the factoring industry than in the banking industry. Our findings indicate that competition in the Italian credit industry was greater in factoring than in banking.
0890-8389
Degl'innocenti, Marta
e33b2a74-a534-44a2-ab66-819b156564c3
Fiordelisi, Franco
9941cce2-6b7a-4a32-aa5e-df6b19e165ec
Trinugroho, Irwan
a8f1cb74-5a28-4ead-8bc3-b0d581d9b757
Degl'innocenti, Marta
e33b2a74-a534-44a2-ab66-819b156564c3
Fiordelisi, Franco
9941cce2-6b7a-4a32-aa5e-df6b19e165ec
Trinugroho, Irwan
a8f1cb74-5a28-4ead-8bc3-b0d581d9b757

Degl'innocenti, Marta, Fiordelisi, Franco and Trinugroho, Irwan (2019) Competition and stability in the credit industry: banking vs. factoring industries. British Accounting Review. (doi:10.1016/j.bar.2019.03.006).

Record type: Article

Abstract

Over the last decade, most credit-industries registered a decline in lending volumes, while factoring industries instead registered a substantial growth in terms of turnover. Surprisingly, only a handful of papers so far investigate factoring companies. Do factoring firms display the same stability levels of banks? Is the competition similar in factoring and banking industries? Is the relationship between competition and stability the same in these industries? Focusing on Italy (one of the largest factoring and banking markets in Europe) and using a unique dataset, we show three main results: factoring companies are (on average) more stable than banks; 2) the stability of factoring companies increase when competition declines (competition-fragility view); 3) the competition-fragility view is weaker in the factoring industry than in the banking industry. Our findings indicate that competition in the Italian credit industry was greater in factoring than in banking.

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competition and stability - Accepted Manuscript
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Accepted/In Press date: 18 March 2018
e-pub ahead of print date: 22 March 2019

Identifiers

Local EPrints ID: 429244
URI: https://eprints.soton.ac.uk/id/eprint/429244
ISSN: 0890-8389
PURE UUID: 5fd8d2a0-9ced-4c3e-9642-ae6c851fb397

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Date deposited: 25 Mar 2019 17:30
Last modified: 19 Jul 2019 16:38

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Author: Franco Fiordelisi
Author: Irwan Trinugroho

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