Title:
|
Do local banking market structures matter for SME financing and performance? New evidence from an emerging economy |
Author:
|
Hasan, Iftekhar
;
Jackowicz, Krzysztof
;
Kowalewski, Oskar
;
Kozłowski, Łukasz
|
Series:
|
Journal of Banking and Finance
|
Series volume:
|
79 |
Series number:
|
June |
Year of publication:
|
2017 |
Publication date:
|
20.3.2017 |
Published in:
|
Published in BoF 22/2014. |
DOI:
|
https://doi.org/10.1016/j.jbankfin.2017.03.009
|
Page range:
|
142–158 |
Keywords:
|
pienyritykset; pkt; yritykset; osuuspankit; ulkomaiset pankit; pankkitoiminta; luotonanto; luotot; rahoitus; siirtymätaloudet
|
JEL:
|
G21; G28
|
Other keywords:
|
Small-business lending; Cooperative banks; Foreign banks; Post-transition countries
|
Abstract:
|
This paper investigates the relationship between local banking structures and SMEs’ access to debt and performance. Using a unique dataset on bank branch locations in Poland and firm-, county-, and bank-level data, we conclude that a strong position for local cooperative banks facilitates access to bank financing, lowers financial costs, boosts investments, and favours growth for SMEs. Moreover, counties in which cooperative banks hold a strong position are characterized by a more rapid pace of new firm creation. The opposite effects appear in the majority of cases for local banking markets dominated by foreign-owned banks. Consequently, our findings are important from a policy perspective because they show that foreign bank entry and industry consolidation may raise valid concerns for SME prospects in emerging economies. |