#00-20
"Bank Competition and Firm Creation"
Abstract: This paper investigates the empirical relationship between competition in the financial sector and the creation of firms in the non-financial sector. It presents new empirical evidence suggesting that competition in banking is more detrimental (or less favorable) to the emergence of new firms in those industrial sector where asymmetric information is more important. Such evidence is consistent with theories of banking arguing that competition maybe have a negative effect on the availability of credit to informationally opaque firms.
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