Endogenous Information, Foreign Banks Entry and SMEs Access to Credit in Emerging Economies

DOI

10.2991/ermm-15.2015.83How to use a DOI?

Keywords

foreign banks, access to credit, SMEs, emerging economies

Abstract

The empirical literature is inconclusive regarding the impact of foreign banks entry on SMEs access to credit, while the theoretical literature supports the cherry-picking behavior of foreign banks. Using a two-period theoretical model in which domestic banks’ information is endogenous, the analysis fully considers the foreign banks’ technological and cost of funds advantage and domestic banks’ informational advantage. The paper finds that foreign banks improve access to credit for SMEs, and there exists a negative correlation between the quality of firms and the domestic banks’ information. The findings provide theoretical support that emerging economies can further remove foreign banks entry barriers to ease the financing problem of SMEs.

Copyright

© 2015, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Zhaojun Li
AU  - Xuemei Yuan
PY  - 2015/04
DA  - 2015/04
TI  - Endogenous Information, Foreign Banks Entry and SMEs Access to Credit in Emerging Economies
BT  - Proceedings of the 2015 International Conference on Education Reform and Modern Management
PB  - Atlantis Press
SP  - 313
EP  - 317
SN  - 2352-5398
UR  - https://doi.org/10.2991/ermm-15.2015.83
DO  - 10.2991/ermm-15.2015.83
ID  - Li2015/04
ER  -