NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Finance as a Barrier to Entry: Bank Competition and Industry Structure in Local U.S. Markets

Nicola Cetorelli, Philip E. Strahan

NBER Working Paper No. 10832
Issued in October 2004
NBER Program(s):   CF   IO

This paper tests how competition in local U.S. banking markets affects the market structure of non-financial sectors. Theory offers competing hypotheses about how competition ought to influence firm entry and access to bank credit by mature firms. The empirical evidence, however, strongly supports the idea that in markets with concentrated banking, potential entrants face greater difficulty gaining access to credit than in markets where banking is more competitive.

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Document Object Identifier (DOI): 10.3386/w10832

Published: Cetorelli, Nicola and Philip E. Strahan. "Finance As A Barrier To Entry: Bank Competition and Industry Structure In Local U.S. Markets," Journal of Finance, 2006, v61(1,Feb), 437-461.

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