Journal article
The Role of Regulation and Bank Competition in Small Firm Financing: Evidence from the Community Reinvestment Act
Journal of money, credit and banking
21 Apr 2022
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
This paper analyzes how regulation that promotes greater access to bank credit, such as the Community Reinvestment Act (CRA), impacts the financing of small firms. It finds that when areas become CRA-eligible, the likelihood of bank lending to local small firms increases and firms reduce late trade credit payments, consistent with loans allowing small firms to pay trade credit more promptly and avoid late payment fees. The effect is more profound in low- and moderate-income areas where financial constraints are tighter due to low bank competition. The effect is also larger for small firms that operate in trade credit-dependent industries.
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Details
- Title
- The Role of Regulation and Bank Competition in Small Firm Financing: Evidence from the Community Reinvestment Act
- Creators
- Panagiotis Avramidis - Amer Coll Greece, Alba Grad Business Sch, Athens, GreeceGeorge Pennacchi - Univ Illinois, Dept Finance, Chicago, IL 60680 USAKonstantinos Serfes - Drexel UniversityKejia Wu - Fed Reserve Bank Philadelphia, Quantitat Specialist, Philadelphia, PA USA
- Publication Details
- Journal of money, credit and banking
- Publisher
- Wiley
- Number of pages
- 40
- Grant note
- 4100072543 / Commonwealth Universal Research Enhancement (C.U.R.E.) program - Pennsylvania Department of Health 1R01AG049970; 3R01AG049970-04S1 / National Institute of Aging; United States Department of Health & Human Services; National Institutes of Health (NIH) - USA; NIH National Institute on Aging (NIA) Urban Health Collaborative at Drexel University Built Environment and Health Research Group at Columbia University
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000784386800001
- Scopus ID
- 2-s2.0-85129574552
- Other Identifier
- 991019168165704721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics