• norsk
    • English
  • English 
    • norsk
    • English
  • Login
View Item 
  •   Home
  • Norges Handelshøyskole
  • Department of Economics
  • Discussion papers (SAM)
  • View Item
  •   Home
  • Norges Handelshøyskole
  • Department of Economics
  • Discussion papers (SAM)
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Endogenous product differentiation in credit markets : what do borrowers pay for?

Kim, Moshe; Kristiansen, Eirik Gaard; Vale, Bent
Working paper
Thumbnail
View/Open
dp2001-27.pdf (251.4Kb)
URI
http://hdl.handle.net/11250/162932
Date
2001-11
Metadata
Show full item record
Collections
  • Discussion papers (SAM) [675]
Abstract
This paper studies strategies pursued by banks in order to differentiate

their services from those of their rivals. In that way competition among banks

is softened. More specifically we analyze if the bank size, the bank’s ability

to avoid losses, and its capital ratio can be used as strategic variables to

make banks different and increase the interest rates banks can charge their

borrowers in equilibrium. Using a panel of data covering Norwegian banks

between 1993 and 1998 we find empirical support that the ability to avoid

losses, measured by the ratio of loss provisions, may act as such a strategic

variable. Our main finding is that borrowers in the market for credit line loans

may discipline banks to avoid losses. We also find evidence that banks pass on

parts of increases in their operating costs to credit line borrowers. However,

we do not find evidence for the use of high capital ratio as a strategic variable that borrowers are willing to pay for.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2001:27

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit
 

 

Browse

ArchiveCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDocument TypesJournalsThis CollectionBy Issue DateAuthorsTitlesSubjectsDocument TypesJournals

My Account

Login

Statistics

View Usage Statistics

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit