Interstate banking,bank consolidation,and bank lending to small business

Proponents and critics of interstate banking argue over the implications of nationwide banking for bank lending to small business. This study explores the patterns of (1) bank consolidation at the national level and (2) the share of domestic-bank commercial lending extended to small firms, specifically, small manufacturing firms, over the period 1976–90. The evidence indicates that despite the trend toward fewer banking organizations and increased aggregate bank concentration due largely to cross-state expansion by superregional banking organizations, no significant downtrend is observed in the share of domestic-bank credit extended to small manufacturing firms. Nor is there any discernible downtrend in banks' share of borrowing by small manufacturing firms. These results are consistent with the thesis that banking industry consolidation hasnot led to a reduction in the supply of bank credit to small firms, at least within the manufacturing sector.     

SME lending and banking system stability: Some mechanisms at work

This paper sheds light on the effects of SME lending on banking system stability. Using a dataset of 32 economies during 2007–15, we find that higher growth in SME lending is associated with greater banking system stability, as measured by greater distance to default, but only in emerging market economies (EMEs). In EMEs, financial development tends to be lower and information asymmetries higher so that profitable projects may remain unfinanced.     

Some policy implications of bank participation in small business administration lending programs

This study examines the relationship of bank participation in SBA guaranteed lending programs to bank characteristics and market demographic characteristics. Band SBA lending is related to per capita income in the bank's market area, membership in a bank holding company, the loan-deposit ratio of the bank, the percent business loans of the bank, and the total assets of the bank. In markets of 50,000 or less, greater SBA lending is associated with lower per capita income levels. Accordingly, it appears that the economic development function of bank SBA lending is linked to a greater extent with market areas of less than 50,000.     

Cost of small business banking: a New Zealand study

The research reported in this article develops a model for assessing the cost of banking services faced by small businesses. The lack of price competition in the provision of small business banking services combined with limited transparency concerning actual fee levels prevents small businesses from readily estimating likely fee levels. Prior research and government reports note the difficulties faced by small business in relation to banking services and this research contributes to an understanding of the potential dead weight losses incurred resulting from poor signalling and information asymmetry and potentially a deficient public policy framework.

Bank monitoring, profit efficiency and the commercial lending business model

We build a bank-specific, fixed-effects regression model to develop proxies for a bank's monitoring effort. Our results show that banks that devote more resources to monitoring (based on these proxies) are more profit efficient and the effect is large. A very important theoretical literature in finance suggests that monitoring is value enhancing; we provide empirical evidence consistent with the theory. This research thus establishes an important link between the large literature on bank monitoring and the equally large literature on profit efficiency. Monitoring is a key technology in the commercial lending business model (e.g. Mester, Nakamura, & Renault, 2007). Thus, these results point to considerable strengths in the dominant business model used in the banking industry.     

Financial reforms in Chinese banking: The impact on personal lending and operational efficiency

The Chinese financial system has historically been one of secrecy, distrust, and corruption. The process does not align with the western standards of transparency and auditing. In contrast to the transaction-based business culture of the West, Chinese business society is relationship-based (quanxi), which still seems to play a key role in the credit decision. With the growth of the emerging middle class, access to financial instruments such as credit cards, life insurance, stock purchases, and the like will play a greater role in the life of the Chinese consumer. Based on these forecasts, the authors recommend seven actions to manage financial activities in China, all of which are explored within this article.     

Shadow banking in Asia: Foreign versus domestic lending to real estate projects

We compare the types of loans and their rates of returns for domestic versus offshore small and mid-sized private real estate credit funds. The data indicate offshore private credit funds issue smaller and subordinated loans to residential projects. Offshore lenders prefer projects in developed Asian markets, and obtain higher rates of return even after controlling for other things such as loan size, seniority, and borrower location. Our findings suggest the presence of pronounced segmentation across real estate lending markets in Asia as offshore lenders are not a substitute for domestic capital.     

发展电子银行业务的措施分析

电子银行业务作为商业银行业务发展的新型分销方式和渠道,是商业银行未来生存发展中必不可少的竞争手段,已经成为各大商业银行和中小银行的效益增长点和服务利器,也成为现代商业银行转变经营方式、实现战略转型的重要组成部分.     

发展电子银行业务的措施分析

电子银行业务作为商业银行业务发展的新型分销方式和渠道,是商业银行未来生存发展中必不可少的竞争手段,已经成为各大商业银行和中小银行的效益增长点和服务利器,也成为现代商业银行转变经营方式、实现战略转型的重要组成部分.     

Relationship lending and SME financing in the continental European bank-based system

This paper analyzes the relationship between banks and SMEs in the continental European bank-based system. We find that SMEs with longer bank relationships have enhanced access to loans, but at the same time they bear a higher cost for their debt. We also find that firms maintaining two bank relationships get the cheapest debt, which establishes a limit for the degree of concentration of bank relationships. Our results also show that the existence of trust between firm and bank improves access to financing and reduces the borrowing costs, whereas it increases the likelihood that guarantees will have to be provided. As a consequence, it seems that a relationship based on trust is a better strategy to improve SMEs’ access to finance than the establishment of longer or more concentrated relationships.     

Market power in banking,countercyclical margins and the international transmission of business cycles

By introducing an imperfectly competitive banking sector into a standard two-country, two-good RBC model with complete asset markets, we study the international transmission of aggregate TFP shocks in an environment with noncompetitive financial intermediation. In this model, price-cost margins in a global loan market are endogenous and countercyclical. As a result, a positive TFP shock in one country spills over to another through a reduction in the global cost of both credit and externally financed investment. The quantitative analysis shows that countercyclical margins on loans play a key role in bringing the predictions of the theory closer to the observed cross-country cyclical co-movements of consumption, employment, investment and output. Recessions are deeper when the cost of credit rises during these economic downturns. Thus, a financial accelerator arises in our framework, unveiling the increased importance of stabilization policies in economies where margins in credit markets are countercyclical.     

The effect of stimulus policy on lending behavior and bank risk: Evidence from the Chinese banking sector

Considering China's stimulus policy in 2008 as a quasi-natural experiment, our study attempts to provide evidence to understand how expansionary monetary policy is likely to influence bank risk-taking in emerging markets, specifically in China. Using data on Chinese counties from 2006 to 2011, we theoretically discuss and empirically observe a positive relationship between the stimulus policy and bank risk-taking, as measured by nonperforming loans. Such a nexus stems from the negative effect of the stimulus policy on banks' lending standards and the positive effect on banks' credit support to small and medium sized enterprises. In addition, our study is enriched by estimating the moderating effects of bank capitalization based on the “risk-shifting” effect and “search for yield” effect caused by the stimulus policy. Specifically, we find important differences across banking groups, such that small and medium-sized banks with low capitalization increase their exposure to risk, while large state-owned banks with high capitalization notably reduce their risk tolerance. The results of this study may help to characterize monetary policy and macro prudential regulation, especially for emerging economies.     

Supply-side strategic unemployment in small business

In this paper, the model which will be analysed is characterized by a labour market with (a) profitable vacancies, (b) unemployment, (c) excess labour supply, (d) limited mobility and divisibility of labour, and (e) competition on-the-job. The analysed setting is typical for a small-business economy. The analysis suggests that unemployment will be greater than equilibrium unemployment if present employees and potential entrants consider job assignments for this market under strategic perspectives.     

Introduction: Innovation and small business

This paper introduces the special issue of Small Business Economics on Innovation. What binds the papers together is either their focus on the effect of firm size on the causes and consequences of innovation or their focus on the role small firms play in reshaping the industrial landscape.     

基于社会关系嵌入的私人银行业务发展探究

随着高净值人群的快速增长,我国私人银行业规模也迅速扩张,但同时遭遇服务供不应求、盈利状况不佳及客户群不稳定的发展瓶颈。基于我国特有的文化背景和私人银行客户群的特殊理财观,本文指出将社会关系嵌入私人银行服务的必要性及其在现实中的发展状况。细分客户群和提升专业服务能力是社会关系嵌入式的私人银行服务得以实施的基础。     

Owner sacrifice and small business growth

Owner sacrifice was studied as a key variable for predicting small business growth dynamics. Using Conservation of Resources Theory, three different types of sacrifice were defined: personal, financial, and relational. Their relation to growth was studied on data collected through structured interviews in 852 small firms in thirteen cities in Turkey. Personal sacrifices in time and effort had a positive effect on continuous growth, both singularly and in interaction with firm's environment, size, and strategic planning. Sacrifices in personal finances were negatively associated with continuous growth, which is interpreted as an outcome of internal financing and risk-avoidance by Turkish firms. Sacrifice as a multi-dimensional construct may be invaluable in studying small business growth in cultures with similar characteristics.     

Cyprus small business ventures invigorate the economy

Cyprus has managed to advance itself and be recognized as one of the world's 32 advanced economies. By supporting local and foreign socioeconomic interests over the years, the small island‐nation today boasts rapid growth, full employment conditions, external and internal stability, strong telecommunications infrastructure, and a society well prepared to embrace the emerging knowledge economy. Recognizing its susceptibility to external economic trends as well as its attraction for various migrant groups, however, the people of Cyprus have embraced the benefits of putting their social capital to financial gain and the improvement of quality of life by supporting local business and welcoming foreign investment. © 2012 Wiley Periodicals, Inc.