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Does banking consolidation worsen firms’ access to credit? Evidence from the German economy

Does banking consolidation worsen firms’ access to credit? Evidence from the German economy This paper deals with the question whether the ongoing process of banking consolidation, which can be observed all over the world, worsens SMEs’ access to credit. We focus in our empirical study on SMEs in Germany, a country where SMEs are the backbone of the economy. A negative trend in the provision with bank credit may thus adversely affect growth and employment. Based on a comprehensive dataset on German firms and banks we find—contrary to public fear—that the ongoing banking consolidation in Germany does not have a significant negative impact on the financing of German firms during the observation period from 1996 to 2002. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Does banking consolidation worsen firms’ access to credit? Evidence from the German economy

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References (31)

Publisher
Springer Journals
Copyright
Copyright © 2009 by Springer Science+Business Media, LLC.
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
DOI
10.1007/s11187-008-9168-0
Publisher site
See Article on Publisher Site

Abstract

This paper deals with the question whether the ongoing process of banking consolidation, which can be observed all over the world, worsens SMEs’ access to credit. We focus in our empirical study on SMEs in Germany, a country where SMEs are the backbone of the economy. A negative trend in the provision with bank credit may thus adversely affect growth and employment. Based on a comprehensive dataset on German firms and banks we find—contrary to public fear—that the ongoing banking consolidation in Germany does not have a significant negative impact on the financing of German firms during the observation period from 1996 to 2002.

Journal

Small Business Economics – Springer Journals

Published: Jan 24, 2009

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