Competition and stability in the credit industry: Banking vs. factoring industries |
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| Institution: | 1. Southampton Business School, UK;2. University of Rome III, Italy & Middlesex University, UK;3. Universitas Sebelas Maret, Indonesia;1. Department of Accounting and Finance, University of Bristol, Priory Road, Bristol, BS8 1TN, United Kingdom;2. Alliance Manchester Business School, The University of Manchester, AMBS Building, Booth Street West, Manchester, M15 6PB, United Kingdom;1. School of Finance, Nankai University, Tianjin, China;2. Department of Finance and Economics, School of Business, Rutgers University, Janice H. Levin Building, Rockefeller Rd., Piscataway, NJ, 08854, USA;3. Providence University and PAIR Labs, Taiwan;1. University Rey Juan Carlos, Paseo Artilleros s/n, 28032, Madrid, Spain;2. Santalucía and Universidad Complutense de Madrid, Spain;3. Universidad Complutense de Madrid and Instituto Complutense de Análisis Económico, Spain;1. Manchester Metropolitan University Business School, Department of Accounting, Finance and Banking, Manchester, M15 6BH, United Kingdom;2. Lancaster University Management School, Department of Accounting and Finance, Lancaster, LA1 4YX, United Kingdom;1. Cnrs - IRISSO, University Paris Dauphine PSL, France;2. Labex Refi (ESCP Europe), France |
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| Abstract: | Over the last decade, most credit-industries registered a decline in lending volumes, while factoring industries instead registered a substantial growth in terms of turnover. Surprisingly, only a handful of papers so far investigate factoring companies. Do factoring firms display the same stability levels of banks? Is the competition similar in factoring and banking industries? Is the relationship between competition and stability the same in these industries? Focusing on Italy (one of the largest factoring and banking markets in Europe) and using a unique dataset, we show three main results: factoring companies are (on average) more stable than banks; 2) the stability of factoring companies increase when competition declines (competition-fragility view); 3) the competition-fragility view is weaker in the factoring industry than in the banking industry. Our findings indicate that competition in the Italian credit industry was greater in factoring than in banking. |
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| Keywords: | Banking Factoring Competition Stability G21 G23 G28 |
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