Journal of Money, Credit, and Banking

Using a unique database for 74 countries and for firms of small, medium, and large size we assess the effect of banking market structure on the access of firms to bank finance. We find that bank concentration increases obstacles to obtaining finance, but only in countries with low levels of economic and institutional development. Alarger share of foreign-owned banks and an efficient credit registry dampen the effect of concentration on financing obstacles, while the effect is exacerbated by more restrictions on banks' activities, more government interference in the banking sector, and a larger share of government-owned banks.