Does Local Competition Impact Interest Rates Charged on Small Business Loans? Empirical Evidence from Canada |
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Authors: | Mallett Ted Sen Anindya |
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Institution: | (1) Canadian Federation of Independent Business, Canada |
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Abstract: | Using a unique survey database of Canadian small business loans,we find a negative and statistically significant relation between the number of localcompetitors and small business loan rates. This result is robust to the presence of a wide varietyof covariates intended to proxy the effects of both loan specific details and individualcharacteristics. These findings further suggest that the local markets definition applied to small businessloans is still relevant, despite recent technological innovation such as internet banking. |
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Keywords: | Banks competition local markets small business loans |
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