Online Resource
[S.l.] : SSRN
Format:
1 Online-Ressource (28 p)
Content:
This paper analyzes the effects of a bank's equity stake in a competitor of a borrower on the financing relationship with the borrower and on product market outcomes. We show that depending on its size, the bank's equity stake in the competitor can give rise to anti-- or pro--competitive effects. Large equity stakes can facilitate anti--competitive conduct. In sharp contrast, small equity stakes are pro--competitive. The reason is that the bank's equity stake in the borrower's rival hardens the borrower's budget constraint. This alleviates credit rationing problems and enables the borrower to invest more aggressively. These findings suggest that bank equity holdings in industrial firms have non--monotonic effects on product market competition
Note:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 2002 erstellt
Language:
Undetermined
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