TY - JOUR
AU1 - Petersen, Mitchell, A.
AU2 - Rajan, Raghuram, G.
AB - Abstract This paper provides a simple framework showing that the extent of competition in credit markets is important in determining the value of lending relationships. Creditors are more likely to finance credit-constrained firms when credit markets are concentrated because it is easier for these creditors to internalize the benefits of assisting the firms. The paper offers evidence from small business data in support of this hypothesis. * " We thank Alan Berger, Judith Chevalier, Constance Dunham, Mark Flannery, Michael Gibson, Anne Grøn, Oliver Hart, Steven Kaplan, Robert McDonald, George Pennacchi, Canice Prendergast, Rafael Repullo, Ivo Welch, Lawrence White, and John Wolken for valuable comments on a previous draft. We are again grateful to John Wolken for making a special effort to provide us with some of the data. The editor, Andrei Shleifer, and two anonymous referees made suggestions that improved the paper significantly. We also thank workshop participants at Brigham Young University, the University of California at Los Angeles, Carnegie Mellon University, the Center for Economic Policy Research Conference on Financial Regulation at Toulouse, the Conference on Industrial Organization and Finance at San Sebastian, the University of Chicago, Columbia University, the Federal Reserve Board, the Federal Reserve Banks of Atlanta and Minneapolis, Harvard Business School, Indiana University, London School of Economics, Massachusetts Institute of Technology, Northwestern University, Southern Methodist University, Stanford University, Virginia Polytechnical Institute, the University of Wisconsin, and the Utah Winter Finance Conference for their insights. This content is only available as a PDF. © 1995 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
TI - The Effect of Credit Market Competition on Lending Relationships
JF - The Quarterly Journal of Economics
DO - 10.2307/2118445
DA - 1995-05-01
UR - https://www.deepdyve.com/lp/oxford-university-press/the-effect-of-credit-market-competition-on-lending-relationships-BD05D60AVw
SP - 407
VL - 110
IS - 2
DP - DeepDyve
ER -