The Effect of Bank Competition on the Cost of Credit: Empirical Evidence from the Visegrad Countries

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F19%3A63523244" target="_blank" >RIV/70883521:28120/19:63523244 - isvavai.cz</a>

Result on the web

<a href="http://www.uni-obuda.hu/journal/Issue91.htm" target="_blank" >http://www.uni-obuda.hu/journal/Issue91.htm</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.12700/APH.16.4.2019.4.9" target="_blank" >10.12700/APH.16.4.2019.4.9</a>

Result language

angličtina

Original language name

The Effect of Bank Competition on the Cost of Credit: Empirical Evidence from the Visegrad Countries

Original language description

The effects of bank competition on the cost of credit are a much-debated topic in Small and Medium enterprises financing. In this paper, we would like to examine the relationship between the cost of credit and interbank-competition in the context of Visegrad countries - the Czech Republic, Poland, Hungary, and the Slovak Republic. The dataset of this paper comes from two different sources, the firm level data provided by the latest version of the Business Environment and Enterprise Performance Survey that was conducted by the European Bank for Reconstruction and Development and the World Bank during 2012 to 2014, and the country level bank competition measures are collected from the Global Financial Database, updated in 2017 [3]. We have examined bank competition with four measures, including structural bank concentration measure and three non-structural (Lerner Index, H-Statistics, and Boone Index) measures. We find evidence that bank competition has a positive effect on the cost of credit and hence, our results are in-line with prior literature on information-based theories of bank competition. We have also assessed the firms in terms of their information opacity (micro, small, and medium), and we find that the cost of credit is higher for the information opaque firms. Thus, firm sizes have important implications for bank competition and cost of credit.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

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Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2019

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Acta Polytechnica Hungarica

ISSN

1785-8860

e-ISSN

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Volume of the periodical

16

Issue of the periodical within the volume

4

Country of publishing house

HU - HUNGARY

Number of pages

21

Pages from-to

175-195

UT code for WoS article

000476902300009

EID of the result in the Scopus database

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