Bank competition and the price of credit : evidence using Mexican loan-level data

Carlos Cañón, Edgar Cortés, Rodolfo Guerrero

This paper studies the relationship between competition measures at the bank level and the price of credit for non-financial firms in Mexico during 2009-2016. Two indicators of competition are constructed: the Lerner indicator and the Boone indicator. Evidence is provided that similar loans provided by banks with higher market power (Lerner indicator) are significantly more expensive: 11 percent higher than the mean interest rate. In addition, that price difference is concentrated in loans given out to microenterprises and small firms, and firms located in the central and southern regions of the country.

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Year of publication:	April 2020
Authors:	Cañón, Carlos Iván ; Cortés, Edgar ; Guerrero, Rodolfo
Publisher:	[Washington, DC] : Inter-American Development Bank
Subject:	Competition \| Banks \| Non -financial firms \| Loan interest rate \| Bank \| Wettbewerb \| Zins \| Interest rate \| Mexiko \| Mexico \| Kredit \| Credit \| Kreditgeschäft \| Bank lending

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Extent:	1 Online-Ressource (circa 38 Seiten)
Series:	Working papers / Inter-American Development Bank, Department of Research and Chief Economist. - Washington, DC : IDB, ZDB-ID 2576368-4. - Vol. no IDB-WP-1103
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	10.18235/0002521 [DOI] hdl:10419/234689 [Handle]
Classification:	G1 - General Financial Markets ; G21 - Banks; Other Depository Institutions; Mortgages ; L13 - Oligopoly and Other Imperfect Markets
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012256390