Logo Logo

The Effect of Credit Market Competition on Lending Relationships, Quarterly Journal of Economics

Abstract

This paper provides a simple framework showing that the extent of competition in credit markets is important in determining the value of lending relationships. Creditors are more likely to finance credit constrained firms when credit markets are concentrated because it is easier for these creditors to internalize the benefits of assisting the firms. The paper offers evidence from small business data in support of this hypothesis.

Type

Article

Author(s)

Mitchell A. Petersen, Raghuram G. Rajan

Date Published

1995

Citations

Petersen, A. Mitchell, and Raghuram G. Rajan. 1995. The Effect of Credit Market Competition on Lending Relationships. Quarterly Journal of Economics. 110(2): 407-443.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more