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Bank market structure, competition, and SME financing relationships in European regions

Bank market structure, competition, and SME financing relationships in European regions
Bank market structure, competition, and SME financing relationships in European regions
How do concentration and competition in the European banking sector affect lending relationships between small and medium sized enterprises (SMEs) and their banks? Recent empirical evidence suggests that concentration and competition capture different characteristics of banking systems. Using a unique dataset on SMEs for selected European regions, we empirically investigate the impact of increasing concentration and competition on the number of lending relationships maintained by SMEs. We find that competition has a positive effect on the number of lending relationships, weak evidence that concentration reduces the number of banking relationships and weak persistent evidence that they tend to offset each other
sme financing, relationship banking, bank market structure
0920-8550
137-155
Mercieca, Steve
77ab560d-231d-49d3-8c3c-743bc79fe609
Schaeck, Klaus
1f6f6cb6-544e-45e9-8ab2-00c99410372e
Wolfe, Simon
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Mercieca, Steve
77ab560d-231d-49d3-8c3c-743bc79fe609
Schaeck, Klaus
1f6f6cb6-544e-45e9-8ab2-00c99410372e
Wolfe, Simon
9a2367fc-36cc-496a-bbd2-e7346bcbb19e

Mercieca, Steve, Schaeck, Klaus and Wolfe, Simon (2009) Bank market structure, competition, and SME financing relationships in European regions Journal of Financial Services Research, 36, (2-3), pp. 137-155. (doi:10.1007/s10693-009-0060-0).

Record type: Article

Abstract

How do concentration and competition in the European banking sector affect lending relationships between small and medium sized enterprises (SMEs) and their banks? Recent empirical evidence suggests that concentration and competition capture different characteristics of banking systems. Using a unique dataset on SMEs for selected European regions, we empirically investigate the impact of increasing concentration and competition on the number of lending relationships maintained by SMEs. We find that competition has a positive effect on the number of lending relationships, weak evidence that concentration reduces the number of banking relationships and weak persistent evidence that they tend to offset each other

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Published date: December 2009
Keywords: sme financing, relationship banking, bank market structure
Organisations: Management

Identifiers

Local EPrints ID: 71398
URI: http://eprints.soton.ac.uk/id/eprint/71398
ISSN: 0920-8550
PURE UUID: a4b2a935-c50a-4973-9bd0-ada36a5ec342

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Date deposited: 10 Feb 2010
Last modified: 19 Jul 2017 00:00

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Contributors

Author: Steve Mercieca
Author: Klaus Schaeck
Author: Simon Wolfe

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