Banking Competition and Firm-Level Financial Constraints in Latin America
Author
dc.contributor.author
Álvarez Espinoza, Roberto
Author
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Jara Bertín, Mauricio
Admission date
dc.date.accessioned
2016-09-26T20:04:40Z
Available date
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2016-09-26T20:04:40Z
Publication date
dc.date.issued
2016
Cita de ítem
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Serie Documentos de Trabajo, No. 426, pp. 1 - 34, Agosto, 2016
es_ES
Identifier
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https://repositorio.uchile.cl/handle/2250/140522
Abstract
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Prior literature argues that, given the existence of information asymmetries and agency costs,
higher competition may increase financial constraints by reducing banks’ incentives to build
lending relationships. Using a sample of listed firms for six Latin American countries, we
analyze the relation between banking competition and financial constraints. We find evidence
in line with prior research that banking competition increases financial constraints. This result
is robust and heterogeneous. We include other country-specific variables and check the
robustness of our findings; the main results hold. Our results show that the effect of
competition differs across firms and industries. Specifically, consistent with the information
hypothesis, the negative impact of competition is higher for small quoted firms and for lowassets
tangibility industries. Also, as expected, we find evidence that firms are more affected
by financial constraints during the last crisis. This negative effect is larger for firms in more
competitive banking industries.
es_ES
Lenguage
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en
es_ES
Publisher
dc.publisher
Universidad de Chile. Facultad de Economía y Negocios