Why Do Payday Lenders Enter Local Markets? Evidence from Oregon |
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Authors: | H Evren Damar |
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Institution: | (1) Department of Business Administration and Economics, State University of New York College at Brockport, 350 New Campus Drive, Brockport, NY 14420-2914, USA |
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Abstract: | This study analyzes payday lenders’ entry strategies in the state of Oregon in order to look for changes in the nature of
the industry and its relationship to traditional financial institutions. The results of fixed-effects logit regressions suggest
that payday lenders have started to enter areas already being served by banks. Furthermore, the presence of “incumbent advantage”
in entry decisions may also have implications concerning the level of competition in the industry. Finally, since payday lenders
also enter areas with large Hispanic populations, it is still possible that payday loans represent the sole source of credit
for certain segments of the population. |
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Keywords: | Payday lending Consumer finance Entry |
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