Financial liberalization has been a controversial issue, as empirical evidence for growth enhancing effects is mixed. Here, we find sizable welfare gains from liberalization (cost to repression), though the gain in economic growth is ambiguous. We take the view that financial liberalization is a...

Using comprehensive loan-level data in China, we investigate how the deregulation on bank entry barriers alters local banking industrial organization and its economic consequences. We document a novel trade-off: the potential benefits of deregulation are adversely mitigated by entrant banks'...

Using proprietary individual level loan data, this paper explores the economic consequences of the 2009 bank entry deregulation in China. Such deregulation leads to higher screening standards, lower interest rates, and lower delinquency rates for corporate loans from entrant banks. Consequently,...