Foreign entry and bank competition
By: by Rajdeep Sengupta
Contributors: Federal Reserve Bank of St. Louis
Series: Working paper -- 2006-043A; Working paper (Federal Reserve Bank of St. Louis : Online) -- 2006-043A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2006
Place of publication: St. Louis, Mo.]
Language: eng
Format: [electronic resource] /
Description: "Foreign entry and bank competition are modeled as the interaction between asymmetrically informed principals: the entrant uses collateral as a screening device to contest the incumbent's informational advantage.  Both better information ex ante and stronger legal protection ex post are shown to facilitate the entry of low-cost outside competitors into credit markets.  The entrant's success in gaining borrowers of higher quality by offering cheaper loans increases with its efficiency (cost) advantage.  This paper accounts for evidence suggesting that foreign banks tend to lend more to large firms thereby neglecting small and medium enterprises.  The results also explain why this observed "bias" is stronger in emerging markets"--Federal Reserve Bank of St. Louis web site.
Notes: Title from PDF file as viewed on 7/27/2006.

Includes bibliographical references.

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Mode of access: World Wide Web.