Bank credit and business financing

This dissertation consists of three essays on empirical banking. They explore the bank lending granted to businesses. Chapter 1 explores the effect of less stringent collateral requirements on small firms’ employment growth. Not having to pledge collateral seems to have an effect on the growth strategy of very small firms leading to a more rapid increase of their workforce. Chapter 2 analyzes the access to long-term credit by firms following takeovers of many domestic banks by foreign banks. Overall, our findings suggest that a wholesale takeover of domestic banks by foreign banks has a widely-shared positive impact on loan rate, in the immediate post-takeover period, and on the loan amount, spread over time. Chapter 3 studies the impact of banking sector reforms on bank lending and trade credit among medium and large firms. A much stronger regulation, either loosening or tightening, seems to spur a bank lending complement, trade credit, among medium and large firms.