Journal of Banking & Finance Vol. 37 No. 5 2013
The effect of banking regulation on cross-border lending
Abstract
Banking regulations often differ between countries: Some regulators require banks to document their evaluation of firms’ creditworthiness, which determines the banks’ choice of lending technology. In a theoretical model, we study how differences in regulation influence competition between domestic and foreign banks and analyze the effect of regulatory harmonization on cross-border lending. We predict that lending rates are lower and access to credit is easier for firms in a border region if the national regulations differ. Using unique bank- and firm-level data from Germany, we show that firms in a border region have better access to credit if regulation differs.
- DOI
- 10.1016/j.jbankfin.2012.09.007
- Volume
- 37
- Issue
- 5
- Pages
- 1310-1322
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib